The Central Drugs Standard and Control Organization (CDSCO) has announced stricter guidelines for the transfer of drugs (APIs and formulations) manufactured in Special Economic Zones (SEZs) to the Domestic Tariff Area (DTA) for sale and distribution. This circular was issued on April 8, 2025.
The circular aims to ensure that drugs sold in the domestic market meet stringent quality, safety, and efficacy standards as mandated by the Drugs and Cosmetics Act and Rules.
Under Schedule-D clause (6) of the Drugs Rules 1945, SEZ units are generally exempt from import regulations for drugs intended for manufacture and export, provided they are not diverted for domestic sale. However, the proviso allows for the sale and distribution of these imported drugs in the DTA if they comply with standard import and registration requirements.
To streamline the transfer process and ensure compliance, the government has implemented the following procedures:
- Banned drugs manufactured in SEZs for export are strictly prohibited from being transferred to the DTA for any purpose.
- Unapproved and approved new drugs manufactured in SEZs must comply with the requirements specified under the New Drugs and Clinical Trials (NDCT) Rules 2019 and the Drugs Rules 1945.
- Drugs manufactured in SEZs that do not fall under the above categories must still adhere to the manufacturing requirements specified in the Drugs Rules 1945.
- If an API is imported into an SEZ for formulation manufacturing, and the formulation is intended for DTA sale, a Registration Certificate and Import License are mandatory for the API.
- APIs, semi-finished, or finished dosage forms imported in bulk packs without a Registration Certificate and Import License are prohibited from being sold or distributed in the DTA.
All port officers have been directed to thoroughly review documents submitted through the ICEGATE portal for clearance of bills of entry pertaining to SEZ-manufactured drugs intended for sale in India, ensuring compliance with the new procedures. They shall also maintain detailed records of these bills of entry and provide the Office of the Drugs Controller General of India (DCGI) with the details of these bills of entry upon request.
These measures are designed to strengthen oversight of drugs moving from SEZs to the domestic market, safeguarding public health by ensuring that all drugs sold in India meet the required quality, safety, and efficacy standards. This will prevent potentially substandard or unregulated drugs from entering the domestic supply chain.
