Licenses Required for a Cosmetics Start-Up in India: A Complete Guide for Entrepreneurs

If you’ve ever dreamed of turning your passion for skincare, haircare, or makeup into a full-fledged business, India is an exciting place to be right now. The country’s cosmetic industry is booming as natural and homemade formulations are trending, social media is creating overnight beauty stars, and consumer awareness is at an all-time high.

But here’s the catch: the minute you move from making products for yourself or your friends to selling them, you step into a space that is highly regulated. And for good reason, as cosmetics go directly onto a person’s skin, hair, or nails. Safety isn’t optional.

This guide walks you through, in plain language, what licenses and approvals you need to legally sell cosmetics in India, the process of getting them, the most common mistakes entrepreneurs make, and answers to real concerns people have before they invest time and money into this business.

Why Cosmetic Licensing Matters Even for “Small” Businesses

Many first-time founders assume that “homemade” equals “exempt from the law.” Unfortunately, it doesn’t. Under the Drugs and Cosmetics Act, 1940 and Rules, 1945, now updated via the Cosmetic Rules, 2020, any product that is meant to be applied to the human body for cleansing, beautifying, altering appearance, or promoting attractiveness falls under the definition of “cosmetic.”

It doesn’t matter if you make 100 jars a month in your kitchen or have a large factory that is once you’re selling, you’re in the regulated space. This is to ensure:

• Products are free from harmful or banned substances
• Labels are accurate and don’t mislead buyers
• Manufacturing is hygienic and meets minimum standards

Skipping the licensing step can lead to product seizures, fines, or even criminal charges is something which can shut down a promising business before it begins.

The Core Licenses That You’ll Need: Manufacturing License

So, in case you plan to make cosmetics yourself, you’ll need a Manufacturing License issued by your State Licensing Authority.

The application is made using Form COS-5 (if you own the premises) or Form COS-6 (loan license if you’re using another licensed facility). After inspection, the authority issues a grant in Form COS-8 (own premises) or Form COS-9 (loan license).

List of what is required from your side:

• Premises that meet the Schedule M-II standards(minimum space, layout, ventilation, water supply, drainage, storage). For example-for creams and lotions, you need at least 25 m² of manufacturing area.
• Qualified technical staff: mainly someone with a degree or a diploma in pharmacy, chemistry, or chemical engineering.
• Proof of possession of premises: a rental, lease agreement, or ownership document
• List of products along with their formulations.
• Label designs that follow the Cosmetic Rules.
• Good Manufacturing Practice (GMP) self-declaration in Form COS-7.
• Fire safety clearance if relevant (especially for aerosols).
• A trademark certificate or application if you’re selling under a brand name.

The licensing fee is ₹10,000 for up to 10 items per category, plus ₹500 for each additional item. The inspection process checks whether your space, processes, and staff meet the legal standards before the license is granted.

What If You Don’t Have Your Facility? Loan Licensing is the Answer.

Not every entrepreneur has the budget for a full manufacturing setup. This is where loan licensing comes in.

In this case, you can collaborate with an already-licensed manufacturer to make use of their facilities and continue to market under your name. You will now still apply for a license (using Form COS-6) and obtain Form COS-9 upon approval.

Start-ups choose this path because it ensures compliance while keeping expenses low.

Product Testing and Quality Control

Even with a license, your products must be safe. So, you’ll need to have them tested in a BIS-approved or NABL-accredited lab for:

• Microbiological safety
• Stability and shelf-life
• Heavy metals and contaminants
• Absence of banned ingredients

Testing isn’t just about ticking a box; it helps avoid future complaints or recalls.

The Rules for Cosmetic Labels

Your label is more than a branding exercise. It’s a legal document. You must display-

• The product and brand name
• net contents (in weight, volume, or number)
• manufacturing date, batch number, and expiration date
• The complete ingredient list in descending order
• The manufacturer’s name and address (and importer, if applicable) must all be displayed on any cosmetic sold in India.
• Usage guidelines and safety precautions
• Maximum Retail Price (MRP) for pre-packaged items

Additionally, the Cosmetic Rules forbid making certain false claims, so making “miracle cure” or “instant whitening” promises without supporting scientific evidence could get you into trouble.

“Cruelty-Free” or “Organic” Claims Need Relevant Certifications:

For you must be able to prove that your products were never tested on animals, to be sold as ‘cruelty-free’. The most well-known certifications are granted by PETA’s Beauty Without Bunnies program, the Leaping Bunny program, and Cruelty Free International. Similarly, claims like ‘organic makeup ‘ also need to be certified by relevant organizations like COSMOS and Ecocert. 

Indian consumers these days are increasingly aware of these issues, and regulators take them seriously.

Other Registrations You’ll Likely Need

Licenses aren’t the only legal step:

• Business registration: Proprietorship, Partnership, LLP, or Pvt Ltd
• GST registration: Mandatory if turnover exceeds ₹20 lakh or if selling interstate/online
• Trademark registration: Protects your brand name/logo from copycats
• Local trade license: Issued by municipal corporations for operating a business in their jurisdiction

Common Myths Busted

‘I only sell on Instagram, so I don’t need a license. ’

Wrong. Online sales are still sales, and you’re subject to the same rules.

‘I can avoid the cost by calling my product a ‘handmade beauty product’.

Also, wrong. The law doesn’t distinguish between handmade and factory-made when it comes to safety and licensing.

‘I’ll get the license later, once I grow. ’

Risky, but if you get caught before that, you may face penalties or even a business ban.

Timelines and Costs Involved:

It can take from 30 to 60 days from the time an application is submitted until it is approved. Factors like the thoroughness of your application and the speed at which inspections are completed usually determine this. The typical start-up costs include:

• A License fee: Ranges around ₹10,000+
• Testing Costs: ₹3,000 to ₹10,000 per product
• GMP compliance upgrades, if needed: variable cost
• Consultancy, optional but can be useful for compliance: ₹20,000+

Reality of Non-Compliance:

The following are the consequences of producing or marketing cosmetics without a license:

-Penalties double for repeat offences

-First offence: up to a year in jail or a fine, or both.

Authorities may also seize your stock, which would severely harm your reputation and could cost much to the business.

Frequently Asked Questions, Answered:

Q: Do I need a license even if I sell at local flea markets or exhibitions?

Yes, if you’re selling to the general public. The size of the customer base and locality are irrelevant.

Q: Can I start with a few products and then expand later on?

Yes, you can add products to your license later by paying the requisite additional fees.

Q: What about imported cosmetics?

They require separate import registration from the CDSCO before their sale in India.

Q: Is there a cheaper way to start?

Yes, you can easily use a third-party manufacturer under a loan license. This reduces setup costs and compliance burdens.

Some Practical Tips Before You Start

1. Document everything from ingredient sourcing to testing reports.

2. Hire or partner with a qualified technical person early.

3. Design your workspace according to Schedule M-II from the beginning.

4. Build testing costs into your pricing; they’re non-negotiable.

5. Market honestly, the beauty industry is trust-driven, and misleading claims can destroy your brand.

In Conclusion

Finally, the cosmetics industry in India is full of opportunity, but it rewards those who build on a foundation of compliance, safety, and trust. The licensing process may feel bureaucratic at first, but it also acts as your business’s credibility stamp.

If you’re serious about building a beauty brand, whether it’s herbal lip balms, artisanal soaps, or high-end skincare, the smartest move you can make is to get licensed before you sell a single unit. It’s the difference between being a hobbyist and a legitimate entrepreneur.

Author Details– Author Details- Apoorva Lamba (3rd Year Student, Madhav Mahavidyalya, Jiwaji University, Gwalior)