Three Licence-Holding Models for India Compared

1. Key takeaways

There are three routes to holding a licence in India: (1) appoint an external authorised Indian agent (the fastest — an MD-42 obtained in 10 working days is enough to establish eligibility), (2) establish your own Indian entity (the strongest control, the longest timeline), and (3) form a joint venture with a local partner (the middle path). What separates the three is not official fees but control, timeline and exit cost.

• Speed and control trade off directly: the external agent is fastest and least controllable; the own-entity route is slowest and most controllable.
• Eligibility is a licence question: every model still requires a manufacturing licence, a wholesale licence or an MD-42.
• Exit is expensive: changing the agent requires a new import licence application.
• Policy supports localisation: the National Medical Devices Policy, 2023 and the PLI scheme favour local manufacturing.

2. Legal basis

The table below sets out the eligibility conditions, the MD-42 timeline, the consequences of changing an agent, the site-endorsement position and the relevant policy background. One row rests on a third-party clause analysis and is marked accordingly.

3. Expert insights

Insight 1: the core tension in licence structure is speed versus control. The external agent is fastest (the MD-42 takes only 10 working days), but replacing that agent requires a fresh import licence application — which effectively hands the other party the key to a supply-chain interruption. Establishing an own entity is slowest, but the control is complete. Most manufacturers do not choose between these on regulatory grounds; they choose on how much of the Indian business they intend to own in five years. That commercial intention should be settled before the agent agreement is signed, because the structure is much easier to choose than to change.

Insight 2: the real risk under the external agent model is lock-in. Three rules stack: changing the agent requires a new application; the new application needs a copy of the predecessor’s licence; and products from the same site must belong to the same licensed party. Together these place the manufacturer in a structurally weak position in any dispute with its agent. If the agreement is poorly drafted, the client is passive in India. The weakness does not appear at signature; it appears the first time the parties disagree about territory, pricing or product scope.

Insight 3: the joint venture model has a policy tailwind in India. The PLI scheme and the medical device parks both provide substantive support for local manufacturing. Where the client already intends to localise over the long term, a joint venture is both a licence-holding solution and an industrial positioning move. The same policy support that makes the joint venture attractive also makes it harder to unwind later, so the partner selection deserves the same scrutiny as the licence terms.

Insight 4: an own entity does not automatically acquire licence eligibility. A newly established Indian entity must still obtain an MD-42 or a manufacturing licence first. Legal existence is not licence eligibility — this is the misconception behind the common assumption that incorporating a company is enough to hold a licence.

4. Practical recommendations

• Phase the structure rather than choosing once. GRZAN usually recommends a staged approach: in phase one, use an external agent to obtain the MD-15 quickly and validate the market; in phase two, evaluate an own entity or a joint venture once sales are stable.
• Put three clauses into the agency agreement from the start. The agreement should contain a document-handover obligation, a termination right, and a site-concentration endorsement provision.
• Use site-concentration endorsement to prevent unauthorised model additions. Endorsing sites on the licence in a controlled way limits the agent’s ability to add products unilaterally.
• Do not assume incorporation creates eligibility. Whatever model is chosen, confirm that the entity holds an MD-42 or a manufacturing licence before relying on it as the licence holder.
• Assess PLI and park policy eligibility where localisation is intended. The policy support is relevant to the structure decision, not only to the factory decision.
• Prefer a structure the manufacturer can control. GRZAN already acts in six Southeast Asian countries as the licence holder, importer and authorised representative through its own entities, so our position is consistent: a controllable licence-holding structure comes first, and we help clients build a controllable structure in India on the same standard rather than merely filing documents.

5. Verification checklist

• □ The licence-holding model has been selected across three dimensions: timeline, cost and control
• □ The external-agent model includes document-handover and termination clauses
• □ Site-concentration endorsement has been agreed, to prevent the agent from adding models unilaterally
• □ It has been confirmed that an own entity or joint venture must still obtain an MD-42 or manufacturing licence first
• □ The applicability of PLI and park policies to localisation has been assessed

Regulatory information verified as of 27 October 2026.

How GRZAN can help. GRZAN provides medical device and IVD registration, quality system, authorised representative and local testing support across South Asia, including India. Our team prepares dossiers to CDSCO expectations, manages SUGAM submissions and deficiency responses, and supports post-market vigilance obligations. Business enquiries: info@grzanglobal.com