How to Start a Cosmetic Business in India?

Starting a cosmetic business in India can be a rewarding venture, especially with the industry growing rapidly and valued at over US$7 billion. From skincare and haircare to makeup and wellness products, consumer demand is on the rise across all age groups and genders. But while the opportunities are promising, entering this space requires more than just a good product idea.

There are important legal steps you need to follow. In India, the manufacturing, importing, and selling of cosmetics is regulated under the Drugs and Cosmetics Act, 1940, and the Rules of 1945. Whether you're planning to launch your own brand or distribute international products, obtaining the right licenses and ensuring regulatory compliance is a must.

This article is designed to guide you through the essential legal requirements, helping you understand what’s needed to start and run your cosmetic business the right way from day one.

Learn more about CDSCO Cosmetic Manufacturing License in India.

What Do We Mean by "Cosmetics"?

Under Indian law, cosmetics are basically products we use on our bodies to look good, feel fresh, or enhance our appearance. The Drugs and Cosmetics Act, 1940 defines cosmetics as items that are applied, rubbed, sprayed, or sprinkled on the body mainly the skin, face, or hair for purposes like cleansing, beautifying, or changing the way we look.

So whether it’s your daily face cream, a lipstick, a deodorant spray, or even a hair serum they all fall under the category of cosmetics. Interestingly, even the raw materials or ingredients used to make these products are also treated as cosmetics under the law.

In short, if a product is meant to help you look better or feel more presentable on the outside, it’s considered a cosmetic in the eyes of Indian law.

Types of Cosmetic Businesses in India

Cosmetic Manufacturing

This involves setting up your own facility to manufacture cosmetic products such as creams, lotions, soaps, shampoos, and makeup items. It offers full control over ingredients, quality, packaging, and branding. However, it requires significant investment in machinery, skilled labor, R&D, and strict adherence to safety and regulatory standards. A cosmetic manufacturing license under the Drugs and Cosmetics Rules, 1945 is mandatory.

Cosmetic Importing

Importers bring in ready-made cosmetic products from international markets and sell them in India. This model is ideal for introducing foreign brands or luxury beauty lines to Indian consumers. It eliminates the need for manufacturing but requires a cosmetic import license from CDSCO, along with compliance related to product registration, labeling, and customs clearance.

Wholesale Distribution

Wholesalers purchase cosmetic products in bulk either from manufacturers or importers and distribute them to retailers, beauty stores, or salons. This B2B model doesn’t involve branding or marketing but focuses on volume sales. It's suitable for those who prefer a backend supply role. Basic trade licenses and GST registration are required, along with efficient logistics and stock management.

Retail Business (Offline & Online)

Retailers sell cosmetics directly to end consumers. Offline retail includes physical stores or pharmacy counters, while online retail can be done through your own website or platforms like Amazon and Nykaa. This model allows better profit margins and brand-building opportunities but requires inventory management, marketing strategies, and customer service. Necessary licenses include GST, trade license, and compliance with labeling rules.

Private Label Cosmetics

Here, you create your own brand without manufacturing the products yourself. Instead, you partner with a third-party manufacturer who produces goods as per your branding and specifications. This is a low-capital model with quicker market entry. However, maintaining quality and compliance remains your responsibility. It’s ideal for startups and entrepreneurs focused on branding and sales.

Salon-Based Product Sales

Beauty salons often sell cosmetic products either as add-ons to services or as a separate revenue stream. Products can be from popular brands or custom-labeled. This model benefits from customer trust and offers a natural upselling opportunity. However, it requires inventory planning and trained staff who can promote the products effectively.

Natural & Organic Cosmetic Brand

This business focuses on producing and selling cosmetics made from natural, herbal, or Ayurvedic ingredients. There is growing demand for chemical-free, sustainable beauty products. It offers strong branding potential but may require AYUSH approval, organic certifications, and additional care to meet quality and labeling standards.

Custom or DIY Cosmetic Kits

In this innovative model, businesses offer do-it-yourself cosmetic kits or personalized beauty products based on individual skin type or preferences. It appeals especially to Gen Z and conscious consumers. While startup costs are lower, it demands creativity, safe packaging, and consumer education. This model works well online and through direct-to-consumer channels.

Licensing required for the Cosmetic businesses

The manufacturing of cosmetics in India is regulated by the state licensing authorities, which are appointed by the respective state governments. These authorities are responsible for issuing manufacturing licenses for cosmetic products. In contrast, the import of cosmetics is regulated by the Central Licensing Authority, appointed by the Central Government. This authority is the Central Drugs Standard Control Organization (CDSCO), which functions under the Ministry of Health and Family Welfare. The CDSCO is headed by the Drugs Controller General of India (DCGI) and is responsible for issuing import licenses for cosmetic products.

Cosmetic Manufacturing License

Any entity intending to manufacture cosmetic products for sale or distribution in India must obtain a Cosmetic Manufacturing License under the provisions of the Drugs and Cosmetics Act, 1940 and the Cosmetics Rules, 2020. This license is issued by the State Licensing Authority of the respective state where the manufacturing unit is located.

There are two primary types of manufacturing licenses:

Manufacturing License (Form 32)

This license is granted to individuals or entities that own and operate their own cosmetic manufacturing facilities. To obtain this license, the applicant must submit Form 31 along with the required supporting documents and prescribed statutory fees to the state licensing authority. Upon approval, the manufacturing license is issued in Form 32. This license authorizes the holder to manufacture cosmetics specifically for the purpose of sale or distribution. The fee for the license is Rs.2,500, which covers up to 10 items per category of cosmetics as listed under Schedule M-II of the applicable rules. Additionally, an inspection fee of Rs.1,000 must be paid for each inspection conducted by the licensing authority. Once granted, the license remains valid for a period of five years and is subject to renewal upon expiration.

Loan License (Form 32-A)

Loan license is specifically granted to individuals or companies that own and operate their own cosmetic manufacturing units. To apply, the applicant must submit Form 31 to the state licensing authority, along with all necessary documents and the prescribed fees. Once approved, the license is issued in Form 32. This license permits the manufacturing of cosmetics for the purpose of sale or distribution. The application fee is Rs.2,500, which covers up to 10 items per category of cosmetics as defined under Schedule M-II of the Drugs and Cosmetics Rules. Additionally, there is an inspection fee of Rs.1,000 for each site inspection conducted by the authority. The license is valid for a period of five years from the date of issuance and can be renewed upon expiry by following the requisite procedures.

Approval License for Testing Cosmetics (Form 37)

Entities that wish to conduct testing of raw materials or finished cosmetic products whether for their own use or on behalf of third parties are required to obtain an approval license specifically for cosmetic testing laboratories. To initiate the process, the applicant must submit Form 36 to the relevant state licensing authority. Upon approval, the license is granted in Form 37. This approval authorizes the laboratory to carry out tests related to the quality and safety of cosmetics. An inspection fee of Rs.1,500 must be paid at the time of application. The license, once granted, remains valid for a period of five years from the date of issuance and may be renewed subject to compliance with the applicable regulatory standards.

Documents Required: 

• Site and layout plan of premises

• Ownership or rental proof of premises

• List of equipment and machinery

• Appointment letters and qualification certificates of technical staff (minimum one person with degree in Pharmacy, Chemistry, or related field)

• Affidavits regarding non-conviction under the Act

• No Objection Certificate (if applicable) from local authorities  

Cosmetic Import License

Entities intending to import cosmetics into India must obtain a license under Rule 13 of the Cosmetic Rules, 2020, read with Section 3(aaa) of the Drugs and Cosmetics Act, 1940. This license is issued by the Central Drugs Standard Control Organization (CDSCO) under the control of the Drugs Controller General of India (DCGI).

Import License (Form 43)

To obtain an import license for cosmetics in India, the application must be submitted in Form 42 by either the foreign manufacturer or their authorized Indian agent. Upon approval, the license is granted in Form 43. The fee structure for this license includes a charge of USD 250 per brand and an additional USD 1,000 for each variant, such as different shades, flavors, or pack sizes. The import license is valid for a period of three years from the date of issuance and is renewable upon expiry. Typically, the processing timeline for granting the import license ranges between 60 to 90 days, depending on the completeness of the application and any additional clarifications sought by the licensing authority.

Eligible Applicants:          

• Indian subsidiaries of foreign cosmetic brands

• Authorized agents or importers in India

• Indian manufacturers importing raw material/components 

Key Documents Required: 

• Covering letter stating intent to import

• Duly filled Form 42

• Power of Attorney (notarized and apostilled)

• Free Sale Certificate from country of origin

• Labeling details in accordance with Rule 34 of Cosmetic Rules

• Product specifications, testing protocols, and ingredient list

• Schedule D(III) duly signed

• NOC from Pollution Control Board (if applicable)

• Importer’s premises and warehouse layout 

Steps to Start a cosmetic business in India

These are the steps a person need to follow if he want to start a cosmetic business in India.

Step 1: Identify Your Niche and Target Market

Before launching your cosmetic business, thorough market research is essential. Understand what your potential customers are lacking or demanding be it organic, ayurvedic, or gender-neutral cosmetics. Analyze customer preferences, behaviors, and concerns, such as why consumers often prefer herbal products over chemical-based ones. With India’s youth population booming and increasing male participation in the cosmetics space, your target audience is broader than ever. Factors like rising disposable incomes, lifestyle changes, and a growing number of working women have also contributed to the growth of the beauty industry. Use tools like surveys and consumer interviews to assess market demand, gather feedback, and shape your product offering accordingly.

Step 2: Register Your Business and Acquire Mandatory Licenses

Once you have a clear product vision, the next step is to formally register your business under a suitable legal structure. If you are a solo entrepreneur, you may opt for a Sole Proprietorship or a One Person Company (OPC). For ventures involving partners or a larger team, structures like a Private Limited Company, Partnership Firm, or Limited Liability Partnership (LLP) are more appropriate. After completing the business registration process, it is important to obtain the necessary licenses and registrations to operate legally. These include GST registration (mandatory if your annual turnover crosses the prescribed threshold), Shop and Establishment Act registration (required for opening a physical store or office), and Trademark registration (to protect your brand name and logo). Additionally, based on the nature of your cosmetic business whether you are a manufacturer, importer, or testing laboratory you may also need to apply for specific licenses under the CDSCO, such as Form 31 for manufacturing, Form 36 for testing labs, or Form 42 for importing cosmetic products.

Step 3: Find a Reliable Cosmetic Manufacturer or Supplier

If you're not planning to make the products yourself, the next best thing is to team up with a good cosmetic manufacturer. Look for someone who runs a certified (GMP-approved) facility, follows all the required rules, and can consistently deliver quality products in the quantity you need. You can find such manufacturers in a few ways ask around in the local market (discreetly, if needed), explore social media using hashtags like #cosmeticsupplier, or check out online directories like Alibaba, IndiaMART, or TradeIndia. These are great places to browse options and connect with the right people. And hey, if you already have a well-tested product and enough funds to start big, you could even think about setting up your own manufacturing unit for full control.

Step 4: Create a Solid Business Plan

Your business plan is like a game plan for your cosmetics journey it helps you stay focused, organized, and ready for whatever comes your way. Start by setting clear goals: what do you want to achieve in the next few months and in the next few years? Then, map out a timeline for hitting those goals and decide what steps you’ll take to get there whether it’s finding suppliers, setting up packaging, or managing deliveries. It’s also smart to think about what could go wrong and how you’d handle it that way, you're not caught off guard. Finally, track your progress regularly using simple tools like Excel sheets or online dashboards. A solid business plan doesn’t just guide you it keeps your efforts grounded and your vision clear as you build and grow your brand.

Step 5: Test Your Product

Before going full-scale, conduct small market trials. Share product samples with family, friends, or early adopters, and seek honest feedback. Use their input to fine-tune packaging, formula, fragrance, and usability. This phase ensures that you're market-ready and builds trust among early consumers. 

Step 6: Build a Marketing Strategy

A strategic marketing plan is vital to gaining visibility and building a loyal customer base. Choose your store location based on the demographics of your target audience for instance, malls for teens or high streets for working professionals. Your product assortment should match local demand, and your product display should be visually appealing, organized, and easy to browse. Additionally, combine online marketing (social media, influencer collaborations, e-commerce) with offline promotions (events, pop-up stores, print ads) to reach a broader audience.

Step 7: Scale and Grow

Once the groundwork is laid, it’s time to think bigger. Expand your product range, explore new distribution channels, and invest in branding. Use data and customer feedback to constantly evolve your offerings. Whether you're planning to sell directly to consumers or enter the wholesale space, keeping your operations legally compliant and customer-centric will help ensure long-term success.

Closing Remarks

Starting a cosmetic business in India is both an exciting and challenging venture. With the beauty and personal care industry witnessing tremendous growth, there’s ample opportunity for entrepreneurs to carve a niche whether through manufacturing, importing, private labeling, or direct-to-consumer sales. However, the success of your cosmetic business depends not just on innovative products, but also on how well you navigate the legal, operational, and market requirements.

What qualifies as a cosmetic under Indian law, choosing the right business model, obtaining the necessary licenses from CDSCO or state authorities, and building a reliable supply chain are critical early steps. Pair that with a strong brand identity, customer-focused marketing strategy, and a clear business plan, and you're well on your way to launching a compliant and competitive brand in the Indian beauty market.

Above all, staying informed about evolving regulations and consumer trends and being willing to adapt is key to sustaining long-term growth in this vibrant and fast-paced industry. 

Frequently Asked Questions

Q1. What qualifies as a cosmetic under Indian law?

Ans. Under Section 3(aaa) of the Drugs and Cosmetics Act, 1940, cosmetics are products intended to be applied to the human body for cleansing, beautifying, promoting attractiveness, or altering appearance. This includes creams, lotions, perfumes, makeup, shampoos, etc.

Q2. Do I need a license to start a cosmetic business in India?

Ans. Yes, depending on your business model. If you are manufacturing, importing, or testing cosmetics, you need a license from the Central Drugs Standard Control Organization (CDSCO) or the respective State Licensing Authority.

Q3. What are the main licenses required for cosmetic businesses?

Ans. Manufacturing License – Form 31 (granted in Form 32) 

• Import License – Form 42 (granted in Form 43)

• Testing License – Form 36 (granted in Form 37)

  Other registrations may include GST, Shop and Establishment, and Trademark registration.

Q4. How long does it take to get a cosmetic import license in India? 

Ans. The CDSCO usually processes import license applications within 60 to 90 days, depending on document accuracy and workload.

Q5. Is it mandatory to have a GMP-certified unit to manufacture cosmetics?

Ans. Yes, for manufacturing, your facility must comply with Good Manufacturing Practices (GMP) as laid out in the Drugs and Cosmetics Rules, 1945.

Q6. Can I start a cosmetic business without owning a factory?

Ans. Yes. You can partner with third-party or contract manufacturers who hold valid manufacturing licenses. This is a common practice for new or small-scale brands.

Q7. Is a license needed for selling cosmetics online?

Ans. No separate license is needed for online sales, but your products must be manufactured/imported legally with proper licenses. You also need GST registration and must comply with e-commerce norms.

Q8. How do I protect my brand name or logo?

Ans. You should apply for Trademark Registration under the Trade Marks Act, 1999, to protect your brand identity and prevent misuse by others.

Q9. What is the validity of cosmetic manufacturing and import licenses?

Ans. Manufacturing License – Valid for 5 years (renewable) 

• Import License – Valid for 3 years (renewable)

Q10. Can one license cover multiple cosmetic products? 

Ans. Yes, but there are limits. For example, Form 31 covers up to 10 items per category. Additional fees apply if you exceed the limit.