Starting a pharmacy, chemist shop or medical store can be a stable healthcare business, but it is not the same as opening an ordinary retail shop.

Medicines are regulated products. A person cannot legally sell, stock, exhibit, offer for sale or distribute drugs except under and according to the conditions of the applicable drug licence.

A pharmacy business therefore requires:

• Suitable premises
• Retail drug licence
• Registered pharmacist
• Proper medicine-storage facilities
• Purchase from authorized suppliers
• Prescription and sale-record compliance
• Proper billing and inventory control

Quick Answer

To start a retail pharmacy in India, follow these basic steps:

1. Select a suitable location.
2. Register your business entity.
3. Arrange independent premises of at least 10 square metres.
4. Appoint a registered pharmacist.
5. Install proper medicine-storage facilities.
6. prepare the required premises and pharmacist documents.
7. Apply to the State Drug Control Department.
8. Complete inspection of the premises.
9. Obtain the retail drug licence.
10. Purchase stock only from licensed suppliers.
11. Start sale after licence approval.

A non-pharmacist may own a pharmacy business, but the pharmacy must appoint a registered pharmacist who genuinely supervises dispensing.

What Is a Pharmacy Business?

A pharmacy business is a licensed retail establishment that sells medicines and related healthcare products directly to patients or consumers.

A pharmacy may sell:

• Prescription medicines
• Non-prescription medicines
• Ayurvedic medicines
• Cosmetics
• Medical devices
• Surgical products
• Personal-care products
• Health supplements
• Nutraceuticals
• Baby-care products
• First-aid products

Different product categories may require separate compliance in addition to the retail drug licence.

Pharmacy, Chemist Shop and Medical Store: Is There Any Difference?

In everyday business language, the following terms are often used interchangeably:

• Pharmacy
• Chemist shop
• Medical store
• Drug store
• Dispensing chemist

Under the Drugs Rules, the nomenclature displayed by a licensed outlet may depend on whether it maintains facilities for compounding medicines against prescriptions.

A premises using descriptions such as “Pharmacy” or “Dispensing Chemist” is traditionally associated with dispensing and compounding facilities. A “Chemists and Druggists” outlet generally employs a registered pharmacist but may not maintain a compounding pharmacy.

In modern retail practice, however, most outlets primarily dispense commercially manufactured and pre-packed medicines.

Who Can Own a Pharmacy?

A pharmacy may generally be owned through:

• Proprietorship
• Partnership firm
• Limited Liability Partnership
• Private limited company
• Society or trust, where applicable
• Hospital or healthcare organization

The business owner does not necessarily have to hold a pharmacy qualification.

However, the business must appoint a registered pharmacist for retail dispensing.

Can a Non-Pharmacist Open a Medical Store?

Yes.

A non-pharmacist may own a medical store, provided that:

• The firm obtains a valid retail drug licence.
• A registered pharmacist is appointed.
• The pharmacist is genuinely associated with the shop.
• The pharmacist is available during medicine-dispensing operations.
• All licence and storage conditions are fulfilled.

The pharmacist’s registration should not be hired or “rented” only for documentation.

Who Is a Registered Pharmacist?

A registered pharmacist is a person who:

• Possesses an approved pharmacy qualification, and
• Has his or her name entered in the register maintained by the concerned State Pharmacy Council.

Recognized qualifications may include:

• Diploma in Pharmacy
• Bachelor of Pharmacy
• Pharm.D
• Other qualifications approved for registration

Completing a pharmacy course does not by itself make a person a registered pharmacist. Registration with the State Pharmacy Council is also required.

Is Pharmacist Registration the Same as Drug Licence?

No.

These are two different approvals.

Pharmacist registration

It is a personal professional registration issued by a State Pharmacy Council.

Retail drug licence

It is a business licence issued for specific premises by the State Drug Control Department.

A registered pharmacist cannot open a medical store merely on the basis of personal registration. The shop must separately obtain a retail drug licence.

Can One Pharmacist Work for Multiple Medical Stores?

One registered pharmacist should not be shown as the responsible full-time pharmacist for multiple retail outlets operating at the same time.

Each pharmacy outlet should have:

• Its own retail drug licence
• Its own approved premises
• Its own registered pharmacist arrangement
• Separate stock and sale records

One person cannot genuinely supervise dispensing at several different locations simultaneously.

Which Drug Licence Is Required?

For an ordinary allopathic retail pharmacy, the commonly applicable retail licences include:

• Form 20
• Form 21

The exact licence or combination of licences depends on the categories of medicines to be sold.

Additional or separate permission may be needed for:

• Schedule X drugs
• Homoeopathic medicines
• Veterinary medicines
• Certain biological products
• Wholesale supply
• Special controlled categories

The applicant should select the licence category with the concerned State Drug Control Department.

Do You Need Wholesale Licence Also?

Not necessarily.

Retail licence is sufficient when:

You sell medicines directly to patients or final consumers.

Wholesale licence may be required when:

You supply medicines to:

• Other chemists
• Hospitals
• Clinics
• Institutions
• Distributors
• Retail pharmacies

If you plan to conduct both retail and wholesale business from the same premises, apply for both sets of licences.

Minimum Area Required

The commonly applicable minimum area is:

Business activity	Minimum area
Retail pharmacy	10 square metres
Wholesale drug business	10 square metres
Combined retail and wholesale	15 square metres

Ten square metres is approximately 108 square feet.

State and local authorities may also prescribe conditions relating to:

• Minimum height
• Independent access
• Commercial use
• Ventilation
• Storage
• Building approval
• Location

Do not finalize a small shop merely because it is described as “100 square feet.” Confirm its carpet area in square metres.

Premises Requirements

The pharmacy premises should generally be:

• Independent
• Easily accessible
• Clean
• Dry
• Well ventilated
• Properly illuminated
• Protected from dust and pests
• Suitable for medicine storage
• Legally permitted for commercial use
• Available for Drug Inspector inspection

The premises should have adequate space for:

• Medicine racks
• Refrigerator
• Dispensing counter
• Billing counter
• Pharmacist workspace
• Customer movement
• Quarantined products
• Returned products
• Expired medicines
• Records and invoices

A Drug Control Department may refuse premises that are unsuitable, shared improperly with residential activity or not permitted for commercial use.

Can a Pharmacy Be Opened from Home?

A home-based pharmacy may be considered only when the proposed premises is:

• Completely independent
• Approved for commercial or permissible mixed use
• Accessible without passing through family living areas
• Of adequate area
• Properly equipped
• Accepted by the State Licensing Authority

A normal bedroom, drawing room or household storage room is unlikely to be suitable.

Always consult the local Drug Inspector before investing in home-based premises.

Is a Refrigerator Compulsory?

A pharmacy should have adequate facilities for products requiring special storage conditions.

A refrigerator is normally required where the shop stocks medicines such as:

• Insulin
• Vaccines
• Certain injections
• Biological products
• Temperature-sensitive preparations

The refrigerator should be used for medicines and not for domestic food storage.

Maintain:

• Temperature monitoring
• Power backup, where necessary
• Cleaning records
• Proper segregation
• No overloading
• Prompt action during temperature excursions

Is Air Conditioning Compulsory?

Air conditioning is not a universal replacement for proper storage.

The premises must maintain the storage conditions stated on medicine labels and required under licence conditions.

Depending on climate, product range and premises design, the authority may expect:

• Air conditioning
• Ventilation
• Temperature monitoring
• Humidity control
• Refrigerator
• Deep freezer
• Power backup

Confirm the required setup with the local Drug Inspector.

Documents Required for Retail Drug Licence

The exact checklist differs by state, but commonly requested documents include:

Business documents

• Proprietorship declaration
• Partnership deed
• LLP documents
• Certificate of incorporation
• Memorandum and Articles of Association
• Board resolution, where applicable
• PAN
• Identity proof of proprietor, partners or directors
• Address proof
• Non-conviction declaration or affidavit

Premises documents

• Registered rent or lease agreement
• Ownership proof
• Landlord’s NOC, where required
• Electricity bill
• Property-tax receipt, where applicable
• Commercial-use proof, where required
• Site plan
• Key plan
• Premises photographs

Pharmacist documents

• Pharmacy qualification certificate
• Mark sheets
• State Pharmacy Council registration
• Registration-renewal proof, where applicable
• Appointment letter
• Bio-data
• Identity proof
• Passport-size photographs
• Full-time employment affidavit or declaration

Facility documents

• Refrigerator purchase bill or details
• Storage-facility declaration
• Temperature-control arrangement
• Computerized billing details, where requested

Application documents

• Prescribed application
• Government fee receipt
• Declarations and affidavits
• Online application acknowledgement
• Any additional state-specific form

All documents should be current, legible and consistent in name and address.

Step-by-Step Procedure to Open a Pharmacy

Step 1: Conduct Local Market Research

Before taking premises, study:

• Population of the area
• Nearby hospitals and clinics
• Number of existing pharmacies
• Doctor-prescribing patterns
• Customer purchasing power
• Delivery demand
• Local competition
• Availability of distributors
• Parking and access
• Shop visibility
• Night-service demand

A pharmacy near a busy clinic can perform well, but competition and rent may also be higher.

Step 2: Select Your Business Structure

Choose between:

• Proprietorship
• Partnership
• LLP
• Private limited company

For a single small store, proprietorship is usually simpler. For multiple founders or future expansion, partnership, LLP or company structure may be more suitable.

Step 3: Select the Premises

Before signing a long lease, confirm:

• Carpet area
• Commercial-use permission
• Independent access
• Water and electricity
• Ventilation
• Storage suitability
• Local municipal rules
• Drug-licence acceptability

Show the premises photographs and documents to the local licensing office where possible.

Step 4: Appoint the Pharmacist

If the owner is not a registered pharmacist, appoint one before submitting the drug-licence application.

Agree in writing on:

• Salary
• Working hours
• Attendance
• Professional duties
• Leave arrangement
• Notice period
• Compliance responsibility

Do not appoint a pharmacist who is already shown as full-time pharmacist at another outlet.

Step 5: Prepare the Shop Layout

Plan separate areas for:

• Prescription counter
• OTC products
• Refrigerator
• Billing
• Customer waiting
• Controlled medicines, where applicable
• Returned goods
• Expired medicines
• Records
• General healthcare products

The site plan should match the actual premises.

Step 6: Install Basic Infrastructure

Arrange:

• Storage racks
• Counter
• Refrigerator
• Thermometer
• Computer
• Printer
• Billing software
• Barcode scanner
• Internet connection
• Fire extinguisher
• CCTV, where appropriate
• Power backup
• Pest-control arrangement
• Signboard

Avoid excessive interior spending before licence approval.

Step 7: Apply for Retail Drug Licence

Submit the application to the concerned State Drug Control Department through its online portal or prescribed process.

The sale and distribution of drugs are mainly regulated by State authorities, although the Drugs and Cosmetics Act and Rules provide the national framework.

Step 8: Complete Inspection

A Drug Inspector may inspect:

• Carpet area
• Premises independence
• Storage facilities
• Refrigerator
• Pharmacist documents
• Business documents
• Layout
• Commercial use
• Cleanliness
• Accessibility
• Record-maintenance arrangements

The pharmacist may also be asked about qualifications, employment and proposed duties.

Step 9: Correct Any Deficiencies

If the authority identifies deficiencies, you may need to submit:

• Revised document
• Corrected site plan
• Additional affidavit
• Better storage arrangement
• Commercial-use proof
• Clarification of pharmacist employment
• Corrected premises details

Respond within the prescribed period.

Step 10: Obtain the Licence

Start medicine sale only after the licence has been formally granted.

Display the required licence and pharmacist details at the premises.

Step 11: Open Accounts with Distributors

Purchase medicines only from authorized and appropriately licensed suppliers.

Collect and verify:

• Supplier drug licence
• GST details
• PAN
• Purchase invoice
• Company authorization, where relevant
• Return and expiry policy
• Credit terms

Avoid buying medicines without proper invoices.

Step 12: Purchase Initial Stock

Do not purchase every available product.

Begin with:

• Fast-moving prescription medicines
• Common chronic-disease medicines
• Fever and pain products
• Gastrointestinal medicines
• Dermatology products
• First-aid products
• Common OTC products
• Baby-care products
• Selected supplements
• Basic surgical items

Study local prescriptions before purchasing large quantities.

Step 13: Start Billing and Record Systems

Your software should preferably track:

• Product name
• Batch number
• Expiry date
• MRP
• Purchase rate
• Sale rate
• GST
• Supplier
• Quantity
• Prescription category
• Reorder level
• Return
• Expired stock

Use the FEFO method: First Expiry, First Out.

Investment Required to Start a Pharmacy

There is no single fixed amount.

Investment depends on:

• City
• Location
• Rent and security deposit
• Shop size
• Interior
• Pharmacist salary
• Initial inventory
• Product range
• Software
• Delivery service
• Working capital
• Credit availability from distributors

Illustrative Small-Pharmacy Budget

The following is only a planning estimate and not a government-prescribed cost:

Expense	Illustrative range
Rent deposit and advance	₹50,000–₹2,00,000
Basic interiors and racks	₹1,00,000–₹3,00,000
Refrigerator, computer and equipment	₹75,000–₹2,00,000
Licence, professional and documentation expenses	₹20,000–₹1,00,000
Initial medicine stock	₹3,00,000–₹10,00,000
Working capital	₹2,00,000–₹5,00,000

A practical small setup may therefore require approximately ₹7 lakh to ₹20 lakh, excluding the purchase price of property.

The amount can be lower in a small town with rented premises and distributor credit, or much higher in a prime urban location.

How Much Medicine Stock Should You Purchase?

Avoid both overstocking and understocking.

Stock planning should consider:

• Local prescriptions
• Seasonal demand
• Chronic medicines
• Fast-moving brands
• Distributor delivery frequency
• Product expiry
• Credit terms
• Available working capital
• Generic versus branded demand
• Nearby hospital specialization

Keep low quantities of expensive and slow-moving products until demand is established.

Profit Margin in a Pharmacy

There is no guaranteed fixed margin for every product.

Retail margin varies according to:

• Product category
• Manufacturer
• Brand
• Price-control status
• Distributor scheme
• Purchase volume
• Generic or branded product
• OTC category
• Cosmetic or supplement category
• Discount offered to customers
• Expiry and breakage losses

Prescription medicines often have moderate trade margins. Generic medicines, cosmetics, supplements and personal-care products may offer higher gross margins, but they may also have different demand and competition.

Gross Margin Is Not Net Profit

From gross margin, you still have to pay:

• Rent
• Pharmacist salary
• Other staff salary
• Electricity
• Software
• Delivery
• Expiry losses
• Discounts
• Interest
• Maintenance
• Tax and compliance costs

A shop with high sales can still make low net profit if rent, discounts and expiry losses are uncontrolled.

FSSAI Licence

A pharmacy needs FSSAI registration or licence when it operates as a food business by selling products such as:

• Health supplements
• Nutraceuticals
• Protein supplements
• Functional foods
• Food for special dietary use
• Food for special medical purpose
• Packaged foods or beverages

FSSAI registration does not replace the retail drug licence.

Select the correct FSSAI category through FoSCoS according to turnover, business type and product range.

Is GST Registration Required?

GST registration depends on:

• Aggregate turnover
• Interstate supply
• E-commerce activity
• Business structure
• Applicable compulsory-registration provisions
• Types of products sold

Many pharmacies take GST registration from the beginning because it helps with:

• Distributor purchases
• Tax invoices
• Input-tax credit
• Business accounting
• Interstate procurement
• Marketplace onboarding

However, GST applicability should be confirmed with a chartered accountant instead of assuming that every small pharmacy is automatically required to register.

Shops and Establishments Registration

State-specific Shops and Establishments registration may be required.

It may regulate:

• Opening and closing hours
• Weekly holiday
• Employee records
• Working hours
• Leave
• Display certificate
• Employment conditions

Check the labour-department requirements applicable in your state.

Other Registrations That May Apply

Depending on the business, you may also need:

• Municipal trade licence
• Commercial-use permission
• Professional tax registration
• Udyam registration
• Fire-safety compliance
• Weights and measures compliance
• Local signage permission
• Biomedical or hazardous-waste compliance, where applicable

Not every registration applies to every shop.

Inspection After Licence Approval

Inspection is not limited to the initial application stage.

Drug Inspectors may later check:

• Pharmacist presence
• Purchase invoices
• Prescription records
• Schedule H1 records
• Expiry stock
• Refrigerator temperature
• Storage conditions
• Licence display
• Unauthorized products
• Sale without prescription
• Controlled-drug records
• Pharmacist change
• Premises changes
• Bills and stock records

Maintain compliance every day, not only during application.

Prescription-Medicine Compliance

Schedule H, Schedule H1 and Schedule X medicines are subject to prescription and record requirements.

A pharmacy should not:

• Sell prescription medicines casually
• Refill restricted prescriptions indefinitely
• Alter a prescription
• Substitute medicines without proper authority
• Sell controlled drugs without required records
• Supply excessive quantities
• Accept clearly forged prescriptions

Schedule H1 sale records are required to be maintained for the prescribed period.

What Records Should a Pharmacy Maintain?

Maintain records such as:

• Purchase invoices
• Sales invoices
• Stock register
• Schedule H1 register
• Schedule X records, where applicable
• Prescription records, where required
• Refrigerator-temperature records
• Expiry register
• Return register
• Supplier licence copies
• Pharmacist attendance
• Complaint records
• Recall records
• Damaged-goods register
• Disposal records

Digital records should be backed up regularly.

How to Handle Expired Medicines

Expired medicines should be:

• Removed from saleable stock immediately
• Clearly marked
• Stored separately
• Recorded batch-wise
• Returned to the authorized supplier where possible
• Destroyed only through a lawful process
• Never sold or donated for patient use

Check expiry dates regularly.

Can a Pharmacy Offer Home Delivery?

A licensed retail pharmacy may offer delivery subject to applicable rules, prescription requirements and state directions.

The pharmacy should ensure:

• Order is processed through licensed premises.
• Prescription is checked by the pharmacist.
• Invoice is generated.
• Delivery maintains storage conditions.
• Patient information remains confidential.
• Cold-chain medicines are handled properly.
• Controlled medicines are not supplied casually.

A separate nationwide e-pharmacy model requires additional legal and operational review.

Can a Pharmacy Sell Ayurvedic Medicines?

Yes, a retail pharmacy may sell lawfully manufactured Ayurvedic medicines.

Check:

• AYUSH manufacturing licence
• Product label
• Batch and expiry details
• Purchase invoice
• Therapeutic claims
• Proper storage

Do not sell unlabelled or unlicensed preparations.

Useful link: Purchase Ayurvedic Medicines Online

Can a Pharmacy Sell Cosmetics?

Yes.

Cosmetics should be:

• Lawfully manufactured or imported
• Properly labelled
• Within shelf life
• Purchased through authorized channels
• Stored appropriately

Cosmetic sales may improve overall pharmacy margin.

Can a Pharmacy Sell Medical Devices?

Yes, but check the current regulatory status of each medical-device category.

Examples include:

• Glucometers
• Test strips
• Thermometers
• Blood-pressure monitors
• Nebulizers
• Masks
• Syringes
• Dressings
• Orthopaedic supports

Buy regulated devices only from authorized suppliers.

Choosing the Best Location

A good pharmacy location may be near:

• Hospital
• Nursing home
• Clinic cluster
• Residential colony
• Market
• Diagnostic centre
• Bus stand
• Senior-citizen population
• Area without adequate pharmacy service

Do not evaluate location only by the number of doctors.

Also study:

• Existing competition
• Rent
• Customer access
• Parking
• Visibility
• Night demand
• Prescription volume
• Population
• Delivery potential

How to Make a Pharmacy Successful

Focus on:

• Genuine medicines
• Pharmacist availability
• Fast service
• Proper stock
• Fair pricing
• Expiry control
• Home delivery
• Chronic-patient refill service
• Clean premises
• Digital billing
• Customer counselling
• Reliable product sourcing
• Ethical business practices

Do not build the business around unauthorized discounts, prescription commissions or medicine substitution.

Common Mistakes to Avoid

Avoid these mistakes:

• Treating pharmacist registration as a shop licence
• Starting sale before licence approval
• Taking premises below the required area
• Renting pharmacist registration
• Buying medicines without invoices
• Selling expired medicines
• Ignoring refrigerator temperatures
• Stocking too many slow-moving products
• Selling prescription drugs without prescription
• Using one pharmacist for multiple shops
• Starting retail and wholesale activity under only one licence
• Selling supplements without checking FSSAI requirements
• Assuming GST is automatically optional or compulsory
• Making structural changes without informing the licensing authority
• Depending only on large discounts to attract customers

Practical Startup Checklist

Before opening, confirm:

• Business entity registered
• Location surveyed
• Premises area measured
• Commercial use checked
• Rent agreement completed
• Registered pharmacist appointed
• Site plan prepared
• Refrigerator installed
• Storage racks installed
• Retail drug-licence application submitted
• Inspection completed
• Licence received
• GST checked
• FSSAI checked
• Shop registration checked
• Distributor accounts opened
• Billing software installed
• Initial stock planned
• Expiry-control system created
• Pharmacist and staff trained

Final Answer

To start a pharmacy, chemist shop or medical store in India, you need an independent and suitable premises, a retail drug licence and a registered pharmacist.

A pharmacy owner does not necessarily have to be a pharmacist, but prescription dispensing must be conducted under genuine pharmacist supervision.

A retail pharmacy generally requires at least 10 square metres of premises. A combined retail-and-wholesale setup generally requires at least 15 square metres.

The safest process is to select the location, verify the premises with the local Drug Control Department, appoint a pharmacist, prepare all documents, apply for the licence, complete inspection and start medicine sales only after approval.

Success depends not only on licence and investment, but also on location, stock planning, pharmacist service, expiry control, ethical dispensing and customer trust.

Frequently Asked Questions

1. Can a non-pharmacist open a pharmacy?

Yes. A non-pharmacist may own the business but must appoint a registered pharmacist.

2. Is B.Pharmacy compulsory for opening a medical store?

No. The owner need not personally hold B.Pharmacy, but the shop must have a registered pharmacist.

3. What is the minimum area required?

Retail pharmacy generally requires at least 10 square metres. Retail-cum-wholesale generally requires at least 15 square metres.

4. Can I open a pharmacy in a rented shop?

Yes. Submit a valid rent agreement, ownership documents and NOC where required.

5. Can I open a pharmacy from home?

Only if the premises is independent, commercially permissible, adequately equipped and approved by the licensing authority.

6. Is a refrigerator compulsory?

Proper cold storage is required when the pharmacy stocks temperature-sensitive medicines. In practice, retail-licence authorities generally expect appropriate refrigerator or cold-storage facilities.

7. Is GST compulsory?

It depends on turnover, interstate supply and other GST provisions. Confirm with a chartered accountant.

8. Is FSSAI required?

It is required when the pharmacy sells food products, nutraceuticals or health supplements covered by food law.

9. Can I do wholesale and retail from the same shop?

Yes, subject to obtaining both licences, providing at least the required combined area and fulfilling both compliance requirements.

10. Can one pharmacist be used for two pharmacies?

One pharmacist should not be shown as the responsible full-time pharmacist for two simultaneously operating outlets.

11. Can a pharmacy sell medicines without prescription?

Only products that may lawfully be sold without prescription can be supplied without one. Schedule H, H1 and X medicines are subject to prescription requirements.

12. How much investment is required?

A small rented pharmacy may require approximately ₹7 lakh to ₹20 lakh, depending on location, stock, interiors and working capital. This is only a planning estimate.

13. What is the profit margin?

Margins vary by product and supplier. Gross margin is not the same as net profit after rent, salaries, discounts and expiry losses.

14. Who issues the retail drug licence?

The concerned State Drug Control Department or State Licensing Authority issues the licence.

15. Can an existing pharmacy start online delivery?

Yes, subject to licence conditions, prescription review, pharmacist supervision, billing, privacy and delivery requirements.

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