India Penalties for Unlicensed Devices: Section 27(b)

1. Key takeaways

Manufacturing, selling or distributing medical devices in India without the required licence is, under s.27(b) of the Drugs and Cosmetics Act, 1940, punishable with 3 to 5 years of imprisonment and a fine of not less than 100,000 rupees or three times the value of the goods confiscated, whichever is higher. Repeat offences attract substantially heavier sentences under s.30, and under s.31 the goods — and in unlicensed situations also the machinery, packaging and means of transport — may be confiscated. The essential point for any company entering India is that these are criminal penalties under the drug law framework, not administrative fines, and the exposure attaches to individuals as well as to the business.

• Devices are brought within the meaning of the Act through s.3(b)(iv): devices notified by the Central Government.
• Unlicensed manufacture, sale and distribution are prohibited by s.18.
• The headline penalty for unlicensed manufacture or sale is 3–5 years of imprisonment plus a fine of at least 100,000 rupees or three times the value of the goods, whichever is higher.
• Other contraventions carry 1–2 years and a fine of not less than 20,000 rupees; imports that are adulterated or spurious carry up to 3 years plus a fine, with enhancement on repetition.
• Confiscation extends beyond the goods themselves: in unlicensed situations the machinery, packaging and means of transport are all within scope.

2. Legal basis

The penalty framework derives from the Drugs and Cosmetics Act, 1940, which applies to devices through the notification mechanism in s.3(b)(iv). The section numbers below are presented on the basis of section lists compiled by law firms and consultancies, and the original text of each section remains authoritative; the compilation is a third-level source and is flagged as such.

Reading the table as a sequence shows how the exposure scales: the notification brings the device into the criminal framework, s.18 makes unlicensed operation an offence, s.27(b) prices the offence in imprisonment as well as money, s.30 multiplies the consequence for repeat conduct, and s.31 extends the seizure from the product to the means of producing and moving it.

3. Expert insights

Insight one: devices in India attract the criminal penalties of the drug law, not administrative fines. This is the direct consequence of devices being notified as drugs under the Act. Companies commonly enter India with the mindset that product compliance is an administrative matter to be settled with paperwork and payments; under this framework the cost of that assumption can be personal, because imprisonment is on the statute book for the conduct itself. Compliance planning should be sized to a criminal exposure, not a fee schedule.

Insight two: the three-times-value alternative is the real economic blow. The fixed minimum fine of 100,000 rupees is not a significant amount for imported equipment, but the three-times-the-value limb scales with the value of the goods. A single shipment of high-value devices therefore carries an unbounded monetary exposure on top of the imprisonment range, and the two limbs are alternatives — the higher one applies. Valuing a consignment honestly is thus part of the risk assessment, because the penalty is defined against that value.

Insight three: the confiscation scope covers the factors of production. Under s.31, in licensed situations what is confiscated is the goods; in unlicensed situations, the machinery, the packaging and the means of transport are all within the confiscation scope. This is not a penalty on one batch — it is the potential loss of the ability to produce at all. For a manufacturer with an Indian production line, the difference between the two situations is the difference between losing stock and losing the plant.

Insight four: products exempted from licensing remain protected by the penalty provisions. Class A devices that are non-sterile and non-measuring are exempt from licensing, but selling adulterated, spurious or misbranded products remains a criminal offence. What is exempted is the licence requirement, not the quality requirement. An exemption is therefore not a general licence to trade without controls; the same Act that exempts the registration step still criminalises quality failures in the exempted category.

4. Practical recommendations

• Adopt as the first compliance discipline for India: before the MD-15 licence or Class A registration number is in place, no commercial import takes place, no sales contracts are signed on predominantly cash-on-delivery terms, and no market promotion occurs.
• As the second discipline: write the licence status into every agreement with Indian distributors, agreeing that losses arising during any unlicensed period are borne by the other party.
• As the third discipline: once an inspection occurs, the regulatory lead — not the sales lead — handles the interface immediately, because the matter involves criminal risk and the messaging must be controlled by professional regulatory judgement.
• Keep documentary proof of the licence or registration status attached to every shipment file, so that any consignment can be shown to be lawful at the moment of inspection.
• Brief the Indian commercial team on the s.31 confiscation scope, so that no one treats an unlicensed shipment as a recoverable commercial loss rather than an asset-seizure event.

The three disciplines above share one logic: the criminal character of the Indian penalty framework means the sequence matters more than the speed. Doing the commercial steps in the right order costs weeks; doing them in the wrong order can cost the licence, the goods, the equipment and, in the worst case, personal liberty.

5. Verification checklist

• ☐ It has been confirmed that the product is notified as a medical device in India
• ☐ The MD-15 licence or Class A registration number has been obtained before commercial import
• ☐ No sale and no promotion has occurred during any unlicensed period
• ☐ Distribution agreements state the licence precondition and the allocation of losses
• ☐ The regulatory lead has been designated as the contact person for inspection responses

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