One is not alien to the concept of the Cosmetics Industry, especially women I’m sure. No, wait!
It would be wrong to conjecture that this business is just women-centric and aloof from men. Gone are the days when such disparity used to exist. Besides this, Cosmetics Business is booming business and will project skyrocketing profits very soon. According to reports-The cosmetic Industry in India is a prospering sector and is expected to grow with more than 9.5% CAGR for 2022-2028.
If you want to start a Cosmetics Import Business in India, then read the following blog to know more.
Table of Contents
- How to Start a Cosmetics Business?
- How To Get A License for Manufacturing of Products?
- How is the Cosmetics Import Registration Certificate Regulated (CDSCO)?
- Understanding the Cosmetics Import Market in India
- Eligibility to Import Cosmetic Products in India
- Regulations Regarding the Manufacturing of Cosmetic Products
- Import Procedures and Documentation Requirements
- Legal and Regulatory Considerations for Cosmetics Import Business in India
- Compliance of Cosmetics Import Business of India
- Expected Gross Profit in Cosmetics Business
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How to Start a Cosmetics Business?
- Have A Business Plan- Undoubtedly, Planning before implementing paves the way for better execution. It allows you to create a roadmap to achieving long-term goals with a mission and objective. Having a plan in place evokes the desired action and guides you accordingly. The following are the answers to your how What, and When -
- Study Market- Much before you think to Establish a Cosmetics Business, you need to study the market well. For instance, pay heed to the factors such as your competitors, strengths and weaknesses to help you gain a clear insight into the market.
- Figure out Your Target Audience- acquire a clearer understanding of the demographics of the people you wish to target. For Example, targeting men and women between the age group of 25-45. It allows you to have a sneak peek at customer preferences, choices and much more.
- Choose products- In the Cosmetic Business, you choose various types of products. Such a thing forces you to choose whatever you wish to sell. Your decisions are based on your comprehensive analysis.
- Budgeting- Within this, it requires you to be calculative and gauge the extent of the initial expenditures. At a beginner’s level, you need to brainstorm the expenditures of legal procedures and equipment involved with other marketing tactics. As per the fixed costs, manage an account of the maintenance of rental buildings, employee salaries, etc. The estimated expenses for a cosmetic business in India begin from 1-2 lakhs.
- Registration procedure- Starting a Cosmetic business requires you to undergo a legal procedure by registering with the designated authorities. The process of the same might vary as well. As per this, one should have a well-defined corporate structure and an established business name, with the necessary permits. One should even seek guidance on such matters.
- Hunt suppliers- It is one of the most crucial aspects of how to supply Cosmetics in India. It is your choice whether you want to buy from the top makeup brand or whether to choose wholesale businesses, (specializing in cosmetics). Make sure your vendor is well established and of a high reputation.
- Marketing- No business exists without marketing. It lies at its very heart. It attracts newer clients and has a loyal support base. With the coming of technology, you can make your Cosmetic Business online. One may promote themselves, reach out to target audiences and gather effective leads.
How To Get A License for Manufacturing of Products?
To get the desired license, an application shall be introduced in Form 31 (application for obtaining a license to manufacture Cosmetics for sale or distribution). The application shall consist of-
- Layout plan of the factory.
- The choice of Machines and equipment to be installed.
- Necessary documents of the constitution of the firm,
- Documents showcasing the premise for the factory appropriated by the applicant, and
- Submission of Affidavits or any other relevant information needed by state drug control authorities.
Before you get the license, the officers of the state regulatory agency will encourage a round of inspection to validate whether the applicant has adequate space for manufacturing, packaging and testing facilities with finished forms of Cosmetics.
How is the Cosmetics Import Registration Certificate Regulated (CDSCO)?
The Cosmetics Import Business in India is regulated through a registration system (online mode) by the Central Drugs Standard Control Organization (CDSCO) to ensure the production of safety and quality of products placed without compromising.
Understanding the Cosmetics Import Market in India
The Drug and Cosmetic Act 1940 refers to “any article intended to be rubbed, poured sprinkled or sprayed on or introduced into or otherwise applied to the human body or any part thereof for cleansing, beautifying, promoting attractiveness or altering the appearance and includes any article intended for use as a component of Cosmetic.
To ensure awareness of the safe usage of cosmetic products in India, a legitimate act has been proposed- The Drug and Cosmetic Act of 1940. It establishes strict verdicts and declarations related to the Sale, Manufacturing and distribution of cosmetics. These provisions introduce a list of cosmetics restricted by law to be manufactured or imported with penalties in case of any breach of the mentioned guidelines.
In addition, Cosmetics products are carefully examined by the Bureau of Indian Standards (BIS) which mention specific standards for cosmetics of any product laid down under Schedule ‘S’ of the Drugs and Cosmetics Act Rules 1945. As a result, it appropriates a full-fledged list of 30 different types of cosmetics, including skin powder, pastes, tooth powders, hair oil, etc. With this, the cosmetics import business needs to fulfil and conform to Indian Standard specifications laid down by BIS.
Eligibility to Import Cosmetic Products in India
Before we shift our gaze to a comprehensive plan for the Cosmetics Import Business, let us have a look at the eligibility criteria that allows cosmetic import registration under the following circumstances-
- The Company That Makes That Product.
- A Person Authorized By the Firm to Sell the Products.
- It Permits Any Importer Or Subsidiary Agent.
Regulations Regarding the Manufacturing of Cosmetic Products
If you wish to manufacture Cosmetics products, a license has to be generated or obtained from the State Regulatory Authority (States Foods and Drug Administration) as recruited by State Government to manufacture cosmetics falling under the category of schedule M-II of the supposed Act for sale and distribution.
Import Procedures and Documentation Requirements
To elaborate, the Ministry of Health and Family Welfare of India, the Central Drug Standards Controller CDSC, carries the supreme power in offering permissions for the Registration of imported cosmetics. For this very purpose, you should file a form COS-5 for Registration and submit it online through an official government website, followed by the applicable fee and the proposed documents.
Nonetheless, the application should be applied through Form-42 with the desired details of the manufacturing sites of these products. The application calls for
- A Cover Letter- Here at Corpseed, you get a readied report after providing the necessary details.
- Power of Attorney- It is with the sense that the application is submitted by an authorized manufacturer or agent. The question is who will legitimize it?
- Well, the Indian Embassy of the country of the manufacturer is in charge of the same.
- List of Ingredients- It should include Details of the brand and cosmetic product while mentioning the chemical composition or other safety measures.
- Labels of proposed product- Corpseed will assist you with the sample labels and other instructions as per CDSCO guidelines.
- Specification & testing methods- These call for the Document from the manufacturer’s end. A test protocol for testing the cosmetics per the specified standards 2020 of the applied product.
- Manufacturing licenses- The licenses for manufacturing have to be included. But as per the multiple manufacturers about the same product, the manufacturers can be asked to furnish the required documents. It has to have an authenticated copy of the manufacturing licenses regarding applied products from the Indian Embassy of the country of origin.
- Free Sale of Certificate- Original Free Sale Certificate is issued by NRA of the country of origin as per applied products or from the Indian Embassy of the country of origin. The product list of the certificate has to be stamped and signed by issuing authority.
- Declaration for Heavy Metal and Hexachlorophene content- To Eliminate your worries, corpseed will provide you with the required format received from the client.
- Application- The application Cos I Form is generated after the submission of the online application.
- Fee- TR-6 Challan (In original)
Note:- If the document is not in English, then English versions of the Document should be provided by the same person.
Procedure- In the cosmetics import business, the CDSCO has provided 88 categories that compulsorily need to obtain license registrations under the Drugs Cosmetics Act 2020. Initially, the applicant can be asked to identify the cosmetic category under which the final product or its variant would fall. Once that is finalised he will need to highlight its variants too.
Legal and Regulatory Considerations for Cosmetics Import Business in India
If you are looking to start a Cosmetics Import Business in India, it is mindful to be aware of the regulations. As of May 2010, all imported cosmetic products must be registered with the Central Drugs Standard Control Organization (CDSCO) before they are sold in the country.
This requirement was introduced to prevent the import of sub-standard or potentially harmful products by mindless traders. By requiring registration, the government aims to ensure that all imported cosmetics meet quality standards and that customers have recourse if they are not happy with a product. If you want to import cosmetics into India, follow the registration process to avoid legal issues.
Compliance of Cosmetics Import Business of India
- Period for processing of the application: Registration Certificate for the Import of Cosmetics needs to be issued within 90 days from the date of submission of the application form.
- The status of Validity of the Registration Certificate: The Registration Certificate for the import of cosmetics is authenticated for three years from the date of issuance.
- Safety information- According to BIS, it is the responsibility of the distributor to suitably inform the customers regarding any labels on such products and whether there are any precautions to be taken during a product’s usage to ensure safety concerns for people. Valid data should be available with the manufacturer as it could be required.
Expected Gross Profit in Cosmetics Business
The average profit margin in cosmetics is 10%-15% minimum, whereas, in luxury brands, the profit margin is more than 50%.
We conclude that the Cosmetics Import Business in India is not so far from making huge strides and is flourishing at an astounding rate. It is even seen that the industry will grow at a CAGR of 6.7% over the next five years.
Cosmetic rules and regulations be strictly followed to ensure the quality and efficacy of cosmetic products. The Regulations are implemented to safeguard the consumer's interest by adhering to safety standards and guaranteeing a cosmetic product in the market.
This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not corpseed, and have not been evaluated by corpseed for accuracy, completeness, or changes in the law.
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