No Free Pass: CDSCO Mandates Registration, Import License for SEZ Drugs Sold in India

The new directive aims to ensure that any such drug movement complies with the required standards of quality, safety, and efficacy under the Drugs and Cosmetics Act and its associated rules.

The circular, issued by the Import and Registration Division of CDSCO, emphasizes that import registration and license are mandatory for any drug entering the Indian domestic market. While SEZ units have certain exemptions under Schedule D, Clause (6) of the Drugs Rules, 1945, allowing them to import drugs for manufacturing and export without the regular import licensing requirements, these exemptions do not extend to domestic sales.

"As per Schedule-D clause (6) of the Drugs Rules 1945, SEZ units are exempted from provisions of Chapter III of the Act and rules made thereunder for import of drugs for manufacture and export subject to the condition that these drugs shall not be diverted for sale in the country," the circular states.

However, the circular allows an exception, noting that “such imported drugs may be permitted for sale and distribution to the domestic area, if they meet the requirements of standard procedure for import and registration as required under Chapter III of the Act and Rules thereunder.”

Key Provisions of the New Procedure

To streamline this process, CDSCO has laid out five major compliance points:

Prohibition of Banned Drugs:

“The Banned drugs manufactured at Special Economic Zone for export purpose are not allowed for transfer to Domestic Tariff Area for any purpose.”

New Drug Regulations:

For both approved and unapproved new drugs, the manufacturer must comply with provisions under the New Drugs and Clinical Trials (NDCT) Rules, 2019, and the Drugs Rules, 1945.

Manufacturing Compliance:

For other drugs not classified under new or banned drugs, manufacturers must still adhere to all Drug Rules, 1945 standards before entering the DTA.

API-based Formulations:

“In case, an API is imported to SEZ for manufacturing of its formulation and the formulation is proposed to be diverted to DTA for sale and distribution, Registration Certificate & Import License are required for that API.”

Unregistered Bulk Imports:

“The API/semi-finished/ finished dosage forms in bulk packs imported without Registration Certificate and Import License shall not be permitted for sale and distribution to the DTA.”

To implement the circular effectively, CDSCO has directed all port, zonal, and sub-zonal offices to scrutinize relevant documentation uploaded to the ICEGATE portal when processing bills of entry related to drugs manufactured in SEZs for domestic sale.

The circular adds;

“Data on these bill of entry should be maintained and the details of such bills of entry should be intimated to the O/o DCGI as and when required.”

The circular has been circulated to all port, zonal, and sub-zonal CDSCO offices and shared with stakeholders via the CDSCO website. A copy has also been sent to the Under Secretary (Drugs), Ministry of Health and Family Welfare, Nirman Bhawan, New Delhi.

While the move provides a structured pathway for SEZ-produced drugs to enter the Indian market legally, it also enforces a stricter compliance regime, especially concerning banned substances, new drug approvals, and licensing of APIs.