Overview: Herbal medicine Manufacturing

The AYUSH ministry is in charge of the herbal medicine industry. Ayurveda, Yoga, Naturopathy, Unani, Siddha, and Homeopathy are all part of the AYUSH acronym. Those who wish to engage in the business of herbal medicine in India must register with the AYUSH. Let's take a closer look at the legalities surrounding this business and the licenses issued by the AYUSH ministry.

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Herbal medicine (also known as phytomedicine or botanical medicine) is a type of medicine made from the roots, seeds, flowers, leaves, berries, and other parts of a plant for medical purposes. Herbalism has been around since the nineteenth century. The rise of the herbal medicinal business in India has been accelerated by advances in analysis, quality control, and clinical research.

Market Analysis of Herbal Medicines from India’s Perspective

The Indian medical plant market was worth Rs 4.2 billion in 2019 and is expected to grow at a 38.5 percent CAGR by 2026. The total value of the global herbal trade is currently estimated to be US$ 120 billion. Due to outdated quality control systems, a lack of advanced processing, R&D, product standardization, and the legal framework in the trade of medicinal plants, India's stake in worldwide herb exports has decreased marginally. The export of medicinal plants and other important extracts is expanding with each passing year. In the 2017-2018 fiscal year, India shipped roughly US$ 330.18 million in herbs, an increase of 14% over the previous year. In addition, exports of productive extracts of medicinal plants and herbal goods were US$ 456.12 million in FY 2017-2018, up nearly 13% from the previous year. Herbal/value-added extracts of medicinal herbs are in high demand in Europe and other developed countries, according to India. 

Licenses Need To Set Up Herbal Medicine Business in India

In India, the AYUSH ministry is in charge of herbal medicine licensing and post-registration compliance. In India, the AYUSH license is a necessary license for such businesses. The three categories of production permits are currently granted by the authorized body within the AYUSH ministry.

1. Ayush Manufacturing License: In order to manufacture Ayurvedic or herbal items in India, you must first obtain an Ayush manufacturing license for herbal products. In recent years, India has established itself as a global leader in the production of herbal goods. In the present COVID-19 situation, demand for herbal or Ayurvedic goods has risen across the country, owing to the fact that these natural treatments can help enhance immunity while also providing a variety of other health benefits. A comprehensive manufacturing license is what this term refers to. The licence also makes the marketing of such products legal. That indicates that after obtaining this licence, production and marketing will be possible. State-by-state procedures and documentation for this license may differ. The applicant who wants to open a herbal product manufacturing facility in India must meet the following requirements:

• If dealing with only one type of medicine, the production facility should be at least 1200 square feet. If other categories were to be added, more space would be necessary.
• GMP certification should be in place at the production facility.
• The presence of two Ayurvedic experts and two pharmacists is required.
• It is necessary to have the essential machinery set up on hand.

2. Loan License: The Ayush loan license is legal authorization for those who do not have access to a manufacturing unit but want to engage in production through a third party who has an AYUSH manufacturing license. Loan licensing is a method of gaining access to third-party production units for enterprises that do not have their own manufacturing units. A loan licence is a production license that allows you to work with a GMP-certified manufacturing facility to create your products. It's great for a company that doesn't have the financial means to set up a full-fledged production facility. You can begin a manufacturing project with your certified facility after obtaining this licence.

3. Contract Manufacturing / Third party manufacturing / White label Manufacturing / Product to Product manufacturing

• A third-party manufacturing license, also known as a white label manufacturing license, is a license that allows you to use a third-party manufacturer's manufacturing license to manufacture your product.
• You have sole authority over the product's marketing. It is not necessary to own a manufacturing unit or obtain any permits in this situation. The manufacturer will handle all of the necessary paperwork and formalities with the Ministry of Ayush.
• In this situation, the manufacturer would need to seek approval from relevant authorities for your product, as you will be using the manufacturer's Ayush production license for herbal goods in India. You will either contribute packaging materials or raw materials, or the manufacturer will make arrangements for the same from these various sources.
• Finally, the manufacturer will deliver the finished product to you. The label affixed to the product displays the name of the firm that oversaw the product's manufacturing and marketing.
• In addition to the conversion charges for product manufacturing, the manufacturer will additionally charge the product approval fees. It is critical to prepare a legal document stating that you are the product's owner.
• If a dispute arises, the legal document must assure that your company remains the product owner. Contract manufacturing is used by the majority of large corporations. For example, one manufacturer is responsible for the five or six chyawanprash brands.
• In this situation, the brands are only concerned with marketing and have outsourced the manufacturing.

What is GMP?

GMP stands for Good Manufacturing Practice, and it's a word that's used all over the world to describe how pharmaceuticals, including herbal medicines, are controlled and quality-assured.  It serves as a foundation for a variety of approaches to quality assurance. GMP Certification considers a number of factors that may have an impact on the final product's quality in one way or another. GMP accreditation is all about the production facility's quality management system being continually improved.

Role of GMP Certification for Herbal Medicine Production Business  

In order to gain a greater reputation in the international herbal markets, one must align their facilities with GMP guidelines and obtain a GMP license as a result. GMP not only ensures excellent products but also helps medication manufacturing facilities establish a respectable image in other markets, resulting in greater sales. GMP stands for Good Manufacturing Practices, and it ensures that products are regularly manufactured and controlled to the quality standards relevant to their intended use and as mandated by marketing permission (WHO 2004). GMP guidelines are a set of minimum requirements that must be met before a marketing license may be granted. If GMPs are not followed, drugs are termed adulterated. However, GMP standards are simply guidelines, and different processes and control methods can be utilized if similar confidence is achieved.

(Note - In order to start an herbal medicine business in India, you must comply with a slew of regulations. If addressing compliance isn't a priority for you, a Complete Manufacturing License with no profit-sharing is an option. Similarly, if you have a limited budget, you can apply for the remaining licenses which eliminate the requirement for a production facility)