Open a Medical Store in India: Its Concept and Process

Open a Medical Store in India
Shivani Jain
| Updated: Nov 28, 2020 | Category: Drug

In India, Pharmacy or Medical Store Business is considered“Evergreen”, as the same is not affected by any economic cycles or pandemic, such as COVID – 19. Also, due to the increasing popularity of multi-speciality and corporate hospitals, India is witnessing significant growth in its Pharmacy sector. Further, to open a Medical Store in India, the key factors to consider by budding entrepreneurs are Capital Investment and Space.

In this blog, we will discuss the concept and procedure of how to open a Medical Store in India.

Growth of Indian Pharmacy Sector

Nowadays, there has been a significant increase in the pharmacy sector all over the world. The same is possible because of its lucrative nature and growing E-commerce.

Further, the growth of the Indian Pharmacy Sector can be summarised by various reports as follows:

  1. Further, according to a report published by India Brand Equity Foundation, dated 21.10.2020, the Indian Pharmaceutical Sector supplies more than 50% of global demand for several Vaccines, which comprises of 40% demand in the US and 25% of all the vaccines in the UK.

Moreover, as per the same report, the Indian Pharmaceutical Sector is projected to grow to the US $100 billion by the end of 2025. Also, the Pharmaceuticals export from India reached the US $20.70 billion in the F.Y. 20.

  • As per a report published by Department for Promotion of Industry and Internal Trade (DPIIT), the Indian Pharmacy Sector has attracted cumulative FDI inflow of US $16.50 billion between April 2000 and March 2020.
  • According to a STATISTA Report published on 16.10.2020, the Value of the Indian Pharmaceutical Exports from the financial year 2012 to 2020 is the US $11 billion.

Different Types of Pharmacy Business

The different types of Pharmacy business prevalent in India are as follows:

Types of Pharmacy Business

Hospital Pharmacy

The term “Hospital Pharmacy” denotes a medical store that is set-up inside a hospital. Further, this type of stores serves only in-hospital medical needs.

Standalone Pharmacy

It is one of the most commonly used medical stores or pharmacy. Further, these stores operate mainly in residential areas and localities.

Chain Pharmacy

The pharmacies or medical stores that are present in Malls or Shopping Complexes are known as chain pharmacy.

Township Pharmacy

When a pharmacy or a medical store is set-up in a Township are, the same is termed as the township pharmacy.

Laws Governing Medical Stores in India

All the medical stores or pharmacies set-up in India are governed and regulated by the provisions of the Indian Pharmacy Act 1948[1].

Regulatory Authority for Medical Stores in India

Prior to open a Medical Store in India, the drugstore owner needs to obtain Drug License in India from both the authorities as follows:

  1. Central Drugs Standard Control Organization (CDSCO).
  2. State Drugs Standard Control Organization (SDSCO).

Different Types of Drug License in India

To open a Medical Store in India, the pharmacy owner needs to acquire either of the Drug License as follows:

Types of Drug License

Retail Drug License

Whenever an individual opens a Medical Store in India, he/she requires to obtain a Retail Drug License from the authorities after paying the prescribed fee.

Further, the basic requirement for this type of drug license is that the applicant must possess a degree or diploma from a recognised university or institute.

Wholesale Drug License

Anyone who wants to open a wholesale pharmacy business in India needs to acquire Wholesale Drug License from the authorities. Further, it shall be considerate to mention that unlike a Retail Drug License, there are no such stringent laws and conditions prescribed to obtain this license.

Minimum Requirements to Open a Medical Store in India

The minimum requirements to open a Medical Store in India are as follows:

Medical Store Minimum Requirements

Area Required

To open a Medical Store in India, the minimum area required is 10 sq. meters, and moreover, an area of 15 sq. meters is needed for a common retail and wholesale pharmacy;

Storage Facility

A drugstore needs to have both an air conditioner and a refrigerator. The same is required to fulfil the labelling specifications, as there are some drugs, such as Vaccines, Insulin Injections, Sera, etc., that are required to be stored in a refrigerator or freezer;

Technical Staff

Technical Staff is required for the types of Pharmacies as follows:

Wholesale Pharmacy

An individual can engage in the wholesale sale of the drug only in the physical presence of either of the following:

  1. The registered pharmacist or in front of a competent person who needs to be a graduate with at least 1 year of experience in trading with drugs;
  2. A person who has successfully passed S.S.L.C with 4 years’ experience in dealing with drugs, which are specially approved by the department of drugs control for the purpose;

Retail Pharmacy

An individual can engage in the retail sale of the drug only in the physical presence of a registered pharmacist, who is approved by the department of drugs control. Further, it shall be considerate to note that the Registered Pharmacist needs to be present throughout the working hours.

Also, Read: Know What are the Guidelines for Retention of Drug License

Business Plan to Open a Medical Store in India

The steps that an applicant requires to follow to open a Medical Store in India are as follows:

Medical Store Business Plan

Outline the Scope of the Business

Nowadays, a lot of alternatives and replacements of traditional antibiotics are emerging regularly. As a result, it is better to explore and research all the available possibilities.

Further, India being the country of celebrated traditions, makes a lot of use of natural medicines and other sources of healing. The same has been provided in our Samhitas and Vedas. Further, the term “natural medicines” includes Siddha, Unani, Homeopathy, and Ayurveda.

Also, it is possible to have a composite pharmacy which provides a combination of the different types of medicines to supply a larger market segment.

Decide the Type of Business Structure

Currently, many people who want to open a Medical Store in India go for the option of taking franchisee for a large conglomerate, such as Ranbaxy, SBL, Apollo, etc. the reason behind the same is its lucrative nature and ready market supply chain, which makes the customer reach easy and smooth. Also, the main benefit of taking franchisee is that it saves the cost regarding the expenses as follows:

  1. Acquiring New Customers.
  2. Promotional and Advertising Costs.
  3. Discounts and Freebies.

However, it shall be pertinent to note that if in case the applicant wants to open a Medical Store in India of his/her own then. In that case, the cost and expenses concerning Brand, Investment, and Strategies will differ. Further, the applicant would require branding consultants, medical professionals for research and study, sales and managing staff in its initial years.

Manage Expenses

Once the applicant has decided its functional staff, he/she would then require to arrange finance for carrying out operations of a Pharmacy Store. Further, the term finance includes the following:

  1. Fixed Element for meeting operational expenses, such as Electricity, Rent, Salaries, etc.
  2. Working Element for purchasing inputs, medicines.
  3. Operational Element for meeting contractual obligations.

However, it shall be noteworthy to note that a hospital pharmacy will tend to have different financing requirements from a standalone drugstore or a brand’s chain pharmacy store.

Establish Research Facility

Unless an individual is thinking of only trading and dealing with wholesalers and selling medicines through his/her own facility, then, in that case, he/she would require to have a research unit of his/ her own.

Further, it shall be significant to state that for a simple unit is required for natural remedies and homoeopathic combinations. In contrast, antibiotics and complex drugs research may require the owner to engage more trained professionals and to maintain a dedicated laboratory.

However, this decision will largely be based on where the applicant sees their business in the coming years.

Obtain a Drug License

The regulatory authorities from which an applicant requires to obtain a Drug License to open a Medical Store in India are as follows:

  1. Central Drugs Standard Control Organization (CDSCO)
  2. State Drugs Standard Control Organization (SDSCO)

Further, the standards, rules, and regulations are prescribed by the CDSCO, whereas, the authority to grant the certificate for Drug License is with SDSCO. However, the State Drugs Standard Control Organization will grant the license only after getting satisfied with the requirements as follows:

  1. Total Area Possessed;
  2. Infrastructure requirements, such as refrigeration, air conditioning, freezing for some specific drugs;
  3. Engaging a qualified, experienced, and registered pharmacist possessing specified qualifications, etc.;

Other Documents and Approvals

It is always suggested to have all the documents and record ready with you to avoid any later stage complexity. The term documents include mainly the guaranteed contracts with suppliers, rental agreements, hospitals, tax registration under GST, retailers, and other approvals as specified by state laws.

Documents Required to Open a Medical Store in India

The documents required to open a Medical Store in India are as follows:

  1. Application Form for Registration in the prescribed format;
  2. Covering Letter with the intent of the registration application form that is duly signed with the name and designation of the said applicant;
  3. Challan of the Fee deposited for obtaining drug license in India;
  4. Declaration form in the prescribed Performa;
  5. Blueprint of the Key plan for the premises;
  6. Blueprint of the Site Plan for the premises;
  7. Basis of possession of the premises;
  8. In the case of the rented property, then rent agreement or lease deed;
  9. In the case of owned property, proof of ownership of the premises;
  10. Proof of business constitution in the form of Incorporation Certificate /MOA (Memorandum of Association) /AOA (Articles of Association) / or Partnership Deed;
  11. Affidavit of non-conviction from the sole proprietor/partners/ directors prescribed under the provisions of the Drugs and Cosmetics Act, 1940;
  12. An affidavit from a registered pharmacist or from a competent person who is working on a full-time basis;
  13. Appointment letter of the registered pharmacist or the competent person, if the applicant is the self-employed person;

Licenses Required to Open a Medical Store in India

The licenses required to open a Medical Store in India are as follows:

Licenses Required to Open Medical Store

Company Registration

To open a Medical Store in India, the different forms of business structure to choose from are as follows:

  1. Sole Proprietorship Registration;
  2. Partnership Firm Registration;
  3. One Person Company Registration;
  4. Private Limited Company;
  5. Limited Liability Partnership Registration;

GST Registration

Any business entity, including a pharmacy or medical store, must obtain GST Registration from the government if the aggregate business annual turnover in a financial year crosses the threshold limit of Rs 40 lakhs.

Further, the limit is reduced to Rs 20 lakhs by the GST Council for all the North-Eastern Hilly states.

Shops and Establishment License or Gumasta Registration

According to the Municipal Rules of the respective municipal corporation, one needs to first acquire Shop and establishment license from the authorities to open a Medical Store in India.

Drug License

Before starting with the operations, it is necessary for every medical store, whether it is big or small, to acquire drug license from the Central Drugs Standards Control Organization (CDSCO) and State Drugs Standard Control Organization (SDSCO).


In a nutshell, every embryonic entrepreneur must understand the concepts and requirements as stated above to make a big impression in the Pharma sector.

Further, a clear business plan elucidates about the methods and journey of an entrepreneur towards success and will always allow him/her to have believed in his/her cause even in the worst of times.

At Swarit Advisors, our professional will assist you with the process of obtaining drug license and how to open a Medical Store in India.

Also, Read: How to obtain a Drug License Certificate in India?


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