CDSCO Relaxes Loan License Requirement for Medical Device Sterilisation

CDSCO Relaxes Loan License Requirement for Medical Device Sterilisation. The Central Drugs Standard Control Organisation (CDSCO) has announced a significant regulatory relief for medical device manufacturers in India. In a recent directive issued to state and Union Territory drug controllers, the CDSCO declared that a loan license would no longer be necessary for outsourcing sterilisation activities of medical devices to third-party facilities. This move aims to streamline the manufacturing process, especially for smaller manufacturers who face hurdles in obtaining loan licenses.
What is Sterilisation in Medical Devices?
Sterilisation is an important process in the production of medical devices. It involves eliminating or reducing microbial contamination to a level that ensures the safety and efficacy of the product in healthcare environments. Common sterilisation methods include radiation, steam, and ethylene oxide gas. Given its importance, the sterilisation process must be carefully monitored and carried out in licensed facilities to ensure compliance with quality standards.
Earlier Requirement of Loan License
Before this change, medical device manufacturers who did not have in-house sterilisation capabilities were required to obtain a loan license. This license allowed them to use another manufacturer's facility to carry out sterilisation of the same medical device. The loan license had to be issued by the state or central licensing authority. While this ensured quality control, it also added layers of regulatory and administrative burden.
Challenges Faced by Small Manufacturers
Smaller companies, in particular, encountered multiple issues with the loan license requirement. The licensing process involved significant paperwork, delays, and operational complexities. This often led to production bottlenecks and affected supply chain efficiency. Stakeholders have been consistently raising concerns about the need for a more flexible approach that accommodates the practical challenges faced by these manufacturers.
Stakeholder Concerns and Committee Formation
Responding to these concerns, the Drugs Consultative Committee (DCC) constituted a sub-committee in June 2023 to examine the issue in detail. The sub-committee included experts and regulatory officials tasked with evaluating whether the loan license requirement could be relaxed without compromising the quality and safety of sterilisation procedures. Their goal was to identify a balanced solution that supports manufacturers while upholding product safety.
Important Recommendations of the Sub-Committee
After thorough examination, the sub-committee recommended that the loan license requirement may not be insisted upon, provided the sterilisation is done at a licensed facility. Specifically, the facility must have a valid license for sterilising the same distinct medical device for which the original manufacturer holds a manufacturing license. The sub-committee concluded that the entire sterilisation activity could be outsourced through a mutual third-party agreement.
Importance of Quality Management System (QMS)
The sub-committee emphasised that all aspects of the Quality Management System (QMS) must be in place to support this regulatory relaxation. It highlighted that even if sterilisation is outsourced, the final product is released from the original manufacturer’s facility. Therefore, the responsibility for quality checks, product release, and compliance with applicable norms remains with the original manufacturer. The outsourcing must be well-documented in the QMS.
Labeling Requirements for Sterilisation Site
Given the important nature of sterilisation, the committee made another key recommendation. It stated that the medical device label must clearly mention the license number of the sterilisation site. This step ensures transparency, traceability, and compliance with labelling requirements under the Medical Devices Rules (MDR), 2017. Such disclosure allows regulators and end-users to verify the legitimacy and standards of the outsourced facility.
Approval from the Drugs Technical Advisory Board (DTAB)
These recommendations were then submitted for approval to the Drugs Technical Advisory Board (DTAB) in its meeting held on April 24, 2025. The DTAB carefully reviewed the proposal, including the rationale behind it and the safeguards proposed to maintain product safety. After deliberation, the DTAB gave its approval to implement the changes. This marked the formal acceptance of the relaxed loan license norm.
Official CDSCO Communication
In a letter dated June 24, 2025, the Drugs Controller General of India (DCGI), Rajeev Raghuvanshi, communicated the approved changes to all state and UT drug controllers. The letter clearly stated that the requirement of a loan license may not be insisted upon for outsourcing sterilisation activities to facilities holding valid licenses. It further instructed regulatory authorities to ensure that manufacturers comply with the new guidelines, especially the documentation and labelling provisions.
Documentary Evidence for Compliance
Although the loan license is no longer mandatory, manufacturers are still required to provide supporting documentation to the licensing authorities. This includes a mutual third-party agreement between the manufacturer and the sterilisation site, QMS documentation detailing the sterilisation process, and evidence of compliance with applicable safety standards. These documents must be submitted prior to obtaining or renewing a manufacturing license.
Impact on Supply Chain and Turnaround Time
Industry experts have hailed this move as a progressive step towards improving supply chain efficiency. Himanshu Baid, managing director of Poly Medicure, remarked that the decision would particularly help manufacturers who lack in-house sterilisation capabilities. The ability to outsource without a loan license will shorten the turnaround time, reduce costs, and eliminate administrative hurdles.
Ensuring Regulatory Oversight
While the loan license requirement has been lifted, CDSCO has taken steps to ensure that regulatory oversight remains intact. By insisting on QMS compliance, label transparency, and prior documentary submission, the regulator maintains control over important processes. This balance ensures that the quality and safety of medical devices are not compromised despite the relaxed norms.
Broader Regulatory Trend
This regulatory change reflects a broader trend within the CDSCO to make the regulatory framework more adaptive and business-friendly. It follows other recent reforms such as revision of export NOC rules and approval timelines for new drugs. These initiatives are aligned with the government’s push to ease business operations and support the Make in India campaign.
Conclusion
The relaxation of the loan license requirement for outsourcing sterilisation of medical devices is a well-calibrated reform that addresses longstanding concerns of manufacturers, particularly smaller firms. By allowing outsourcing through mutual agreements with licensed facilities and focusing on documentation and QMS, CDSCO has created a system that is both efficient and compliant. This change not only supports the domestic medical device industry but also enhances India's position as a global hub for medical device manufacturing.
In case, you need any support in obtaining CDSCO Registration for Medical Devices, then you can reach out to Compliance Calendar LLP through mail at info@ccoffice.in or Call/Whatsapp at +91 9988424211.
FAQs
Q1. What is the recent relaxation announced by CDSCO regarding sterilisation of medical devices?
Ans. CDSCO has announced that manufacturers of medical devices no longer need a loan license to outsource sterilisation activities, provided the third-party facility conducting the sterilisation holds a valid sterilisation license for the same type of medical device. This simplifies the compliance process and supports manufacturers without in-house sterilisation units.
Q2. Why was the loan license requirement problematic for small manufacturers?
Ans. Smaller manufacturers often faced operational delays and administrative burdens while applying for a loan license. The process was complex, involved excessive paperwork, and caused significant delays in production, especially for those lacking their own sterilisation infrastructure. The new relaxation reduces these hurdles and promotes efficiency.
Q3. What are the documentation requirements under the new CDSCO guidelines?
Ans. Even though a loan license is no longer required, manufacturers must submit supporting documents to the licensing authority. This includes a mutual third-party agreement, relevant Quality Management System (QMS) documentation, and evidence that the sterilisation facility is licensed for the specific medical device.
Q4. Is there any requirement regarding labelling of medical devices after outsourcing sterilisation?
Ans. Yes, the medical device label must clearly mention the license number of the sterilisation site. This ensures transparency and allows regulators and consumers to trace the facility responsible for the sterilisation process, reinforcing accountability.
Q5. Does this change mean that the sterilisation process is now unregulated?
Ans. No, the sterilisation process remains a critical and regulated activity. The CDSCO has emphasized that all sterilisation must be done at facilities licensed for the specific device. Additionally, manufacturers remain fully responsible for quality assurance and compliance under their QMS before product release.
Q6. Has the decision been formally approved by any regulatory body?
Ans. Yes, the recommendation to relax the loan license requirement was reviewed and approved by the Drugs Technical Advisory Board (DTAB) in April 2025. It followed detailed analysis by a sub-committee of the Drugs Consultative Committee (DCC) and was formally communicated by the DCGI to all state and UT drug controllers.
Q7. What impact will this decision have on the medical device industry?
Ans. This decision is expected to significantly improve production efficiency, reduce costs, and enhance supply chain operations, especially for manufacturers without in-house sterilisation. It supports ease of doing business and aligns with India’s broader strategy to boost domestic manufacturing in the medical device sector.

The Central Drugs Standard Control Organisation (CDSCO) has announced a significant regulatory relief for medical device manufacturers in India. In a recent directive issued to state and Union Territory drug controllers, the CDSCO declared that a loan license would no longer be necessary for outsourcing sterilisation activities of medical devices to third-party facilities. This move aims to streamline the manufacturing process, especially for smaller manufacturers who face hurdles in obtaining loan licenses.

What is Sterilisation in Medical Devices?

Sterilisation is an important process in the production of medical devices. It involves eliminating or reducing microbial contamination to a level that ensures the safety and efficacy of the product in healthcare environments. Common sterilisation methods include radiation, steam, and ethylene oxide gas. Given its importance, the sterilisation process must be carefully monitored and carried out in licensed facilities to ensure compliance with quality standards.

Earlier Requirement of Loan License

Before this change, medical device manufacturers who did not have in-house sterilisation capabilities were required to obtain a loan license. This license allowed them to use another manufacturer's facility to carry out sterilisation of the same medical device. The loan license had to be issued by the state or central licensing authority. While this ensured quality control, it also added layers of regulatory and administrative burden.

Challenges Faced by Small Manufacturers

Smaller companies, in particular, encountered multiple issues with the loan license requirement. The licensing process involved significant paperwork, delays, and operational complexities. This often led to production bottlenecks and affected supply chain efficiency. Stakeholders have been consistently raising concerns about the need for a more flexible approach that accommodates the practical challenges faced by these manufacturers.

Stakeholder Concerns and Committee Formation

Responding to these concerns, the Drugs Consultative Committee (DCC) constituted a sub-committee in June 2023 to examine the issue in detail. The sub-committee included experts and regulatory officials tasked with evaluating whether the loan license requirement could be relaxed without compromising the quality and safety of sterilisation procedures. Their goal was to identify a balanced solution that supports manufacturers while upholding product safety.

Important Recommendations of the Sub-Committee

After thorough examination, the sub-committee recommended that the loan license requirement may not be insisted upon, provided the sterilisation is done at a licensed facility. Specifically, the facility must have a valid license for sterilising the same distinct medical device for which the original manufacturer holds a manufacturing license. The sub-committee concluded that the entire sterilisation activity could be outsourced through a mutual third-party agreement.

Importance of Quality Management System (QMS)

The sub-committee emphasised that all aspects of the Quality Management System (QMS) must be in place to support this regulatory relaxation. It highlighted that even if sterilisation is outsourced, the final product is released from the original manufacturer’s facility. Therefore, the responsibility for quality checks, product release, and compliance with applicable norms remains with the original manufacturer. The outsourcing must be well-documented in the QMS.

Labeling Requirements for Sterilisation Site

Given the important nature of sterilisation, the committee made another key recommendation. It stated that the medical device label must clearly mention the license number of the sterilisation site. This step ensures transparency, traceability, and compliance with labelling requirements under the Medical Devices Rules (MDR), 2017. Such disclosure allows regulators and end-users to verify the legitimacy and standards of the outsourced facility.

Approval from the Drugs Technical Advisory Board (DTAB)

These recommendations were then submitted for approval to the Drugs Technical Advisory Board (DTAB) in its meeting held on April 24, 2025. The DTAB carefully reviewed the proposal, including the rationale behind it and the safeguards proposed to maintain product safety. After deliberation, the DTAB gave its approval to implement the changes. This marked the formal acceptance of the relaxed loan license norm.

Official CDSCO Communication

In a letter dated June 24, 2025, the Drugs Controller General of India (DCGI), Rajeev Raghuvanshi, communicated the approved changes to all state and UT drug controllers. The letter clearly stated that the requirement of a loan license may not be insisted upon for outsourcing sterilisation activities to facilities holding valid licenses. It further instructed regulatory authorities to ensure that manufacturers comply with the new guidelines, especially the documentation and labelling provisions.

Documentary Evidence for Compliance

Although the loan license is no longer mandatory, manufacturers are still required to provide supporting documentation to the licensing authorities. This includes a mutual third-party agreement between the manufacturer and the sterilisation site, QMS documentation detailing the sterilisation process, and evidence of compliance with applicable safety standards. These documents must be submitted prior to obtaining or renewing a manufacturing license.

Impact on Supply Chain and Turnaround Time

Industry experts have hailed this move as a progressive step towards improving supply chain efficiency. Himanshu Baid, managing director of Poly Medicure, remarked that the decision would particularly help manufacturers who lack in-house sterilisation capabilities. The ability to outsource without a loan license will shorten the turnaround time, reduce costs, and eliminate administrative hurdles.

Ensuring Regulatory Oversight

While the loan license requirement has been lifted, CDSCO has taken steps to ensure that regulatory oversight remains intact. By insisting on QMS compliance, label transparency, and prior documentary submission, the regulator maintains control over important processes. This balance ensures that the quality and safety of medical devices are not compromised despite the relaxed norms.

Broader Regulatory Trend

This regulatory change reflects a broader trend within the CDSCO to make the regulatory framework more adaptive and business-friendly. It follows other recent reforms such as revision of export NOC rules and approval timelines for new drugs. These initiatives are aligned with the government’s push to ease business operations and support the Make in India campaign.

Conclusion

The relaxation of the loan license requirement for outsourcing sterilisation of medical devices is a well-calibrated reform that addresses longstanding concerns of manufacturers, particularly smaller firms. By allowing outsourcing through mutual agreements with licensed facilities and focusing on documentation and QMS, CDSCO has created a system that is both efficient and compliant. This change not only supports the domestic medical device industry but also enhances India's position as a global hub for medical device manufacturing.

In case, you need any support in obtaining CDSCO Registration for Medical Devices, then you can reach out to Compliance Calendar LLP through mail at info@ccoffice.in or Call/Whatsapp at +91 9988424211.

FAQs

Q1. What is the recent relaxation announced by CDSCO regarding sterilisation of medical devices?

Ans. CDSCO has announced that manufacturers of medical devices no longer need a loan license to outsource sterilisation activities, provided the third-party facility conducting the sterilisation holds a valid sterilisation license for the same type of medical device. This simplifies the compliance process and supports manufacturers without in-house sterilisation units.

Q2. Why was the loan license requirement problematic for small manufacturers?

Ans. Smaller manufacturers often faced operational delays and administrative burdens while applying for a loan license. The process was complex, involved excessive paperwork, and caused significant delays in production, especially for those lacking their own sterilisation infrastructure. The new relaxation reduces these hurdles and promotes efficiency.

Q3. What are the documentation requirements under the new CDSCO guidelines?

Ans. Even though a loan license is no longer required, manufacturers must submit supporting documents to the licensing authority. This includes a mutual third-party agreement, relevant Quality Management System (QMS) documentation, and evidence that the sterilisation facility is licensed for the specific medical device.

Q4. Is there any requirement regarding labelling of medical devices after outsourcing sterilisation?

Ans. Yes, the medical device label must clearly mention the license number of the sterilisation site. This ensures transparency and allows regulators and consumers to trace the facility responsible for the sterilisation process, reinforcing accountability.

Q5. Does this change mean that the sterilisation process is now unregulated?

Ans. No, the sterilisation process remains a critical and regulated activity. The CDSCO has emphasized that all sterilisation must be done at facilities licensed for the specific device. Additionally, manufacturers remain fully responsible for quality assurance and compliance under their QMS before product release.

Q6. Has the decision been formally approved by any regulatory body?

Ans. Yes, the recommendation to relax the loan license requirement was reviewed and approved by the Drugs Technical Advisory Board (DTAB) in April 2025. It followed detailed analysis by a sub-committee of the Drugs Consultative Committee (DCC) and was formally communicated by the DCGI to all state and UT drug controllers.

Q7. What impact will this decision have on the medical device industry?

Ans. This decision is expected to significantly improve production efficiency, reduce costs, and enhance supply chain operations, especially for manufacturers without in-house sterilisation. It supports ease of doing business and aligns with India’s broader strategy to boost domestic manufacturing in the medical device sector.