Import registration beauty brands in India – A concise guide

Import registration beauty brands in India – A concise guide

My India market entry consultancy involves networking with various Consulates’ Trade services departments, and I often get requests to answer or clarify questions that international beauty and cosmetic brands have when they wish to enter the market and the challenges to expect concerning doing business in the cosmetics sector.

 

Brands with deep pockets / global brands have made it big here in India because they could invest handsome amounts not only in brand building and marketing, but some of them have invested in the infrastructure too, including manufacturing units to optimize costs.  However, SME brands or brands that are niche or brands that are getting to the next level of expansion have multiple concerns, some of which are listed as follows:

  1. Cost and procedure of registering cosmetics and personal care products
  2. An ever moving/changing standards environment
  3. Fluctuating packaging requirements
  4. Labeling issues
  5. High import tariffs

 

The Beauty market in India is currently pegged at an estimated 14b$ with a CAGR of 18 -20%.  The biggest chunk of this market is in the Mass & Masstige segment due to high awareness in Beauty products and services.  

The key to success lies in making informed decisions on the recruitment of distributors and a thorough assessment in terms of competition mapping, price, and brand positioning, before entering the market.  Tier 1 cities are saturated. The huge hidden potential lies in Tier 2 and Tier 3 cities where international brands are a big aspiration.  The right market entry strategy should be the one that is well researched and planned.

Indeed the import duties for cosmetics & personal care go up to 42%, add to this the cost and freight, distributor’s margin and retailer’s margin. To counter this, the MRPs of cosmetics are usually raised by 15-25% versus US markets.  For more on pricing strategy, please READ HERE

Registration is fairly simple If all the rule are followed and all the documents are submitted in accordance with the Drugs & Cosmetics Act.

 

Level 1: Ensuring correct documentation as per the Drugs & Cosmetics Act authorities that include Power Of Attorney, Free Sale and Labels.  If everything is correct in the first attempt then the documents are transferred to Level 2 for Lab Analysis. Level 1 generally takes 2 months from the date of receipt of documents to raise any query or proceed to Level 2.  If there is any query then the same has to be rectified by the Brand and the documents are resubmitted.

 

Level 2: After crossing Level 1, the composition documents are then forwarded to the lab testing department where the composition of each product is studied. If there is any query or any objectionable composition, then the applicant is informed accordingly.  It takes about 2 months at this level for the final verdict on the composition.  If a query is raised then the compositions have to be re-submitted after corrections. If no query is raised, then its good news and the brand gets a File number and the registration certificate takes about 2 months to receive by post. This RC is valid for 3 years.

 

The whole process takes generally 6-8 months. If all queries are timely addressed and enough diligence taken in documentation, then 6months is all you need.

As regards cost of registration, Govt. Fees applicable is US$ 2000/- per category and US$ 50/- per variant depending on the Brand classification. The Liasoning Agent Fees goes upto US$ 2000. The above costs for a Registration Certificate is valid for 3 years.  For renewal, it is the same process again.

India is in line with global standards of packaging.  The standard requirements are, that every product should include the mfg. batch code, date of expiry, ingredients, and manufacturer’s details clearly printed on the packaging.  With the Indian Government taking steps to be in line with international standards, yes certain standards are evolving. However, if a Registration Certificate is received for 3 years there is a guarantee of import for 3 years, unless otherwise the manufacturer or brand owner makes some changes in its product composition, label design or shifting of premises. In such cases, the concerned authorities have to be duly notified.

If a brand is well-informed about the processes and does everything right in terms of compliances, the next big questions is – what are the ground challenges in terms of distribution network and costs of selling?  Well I will come back with more on this in my next post. Stay tuned…….

My company Argus CMPO helps International beauty brands enter India with ease.  Do leave a comment if you want to know anything specific and I will be more than willing to address it. Alternatively you can contact me on hema.aushat@arguscmpo.com

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