CDSCO’s market interventions and the new compliance framework for pharma and cosmetic operations

India's life sciences, pharmaceutical, and consumer healthcare sectors are entering a more enforcement-driven regulatory phase. Recent interventions by the Central Government, the Central Drugs Standard Control Organisation (‘CDSCO’), and various State Food and Drug Administrations (‘FDAs’) indicate heightened scrutiny of market access, product quality, distribution channels, labelling discipline, and post-market accountability.

This article examines the key developments driving this shift and their practical implications for industry participants.

Introduction

CDSCO’s actions over the past several months suggest increased focus on three core areas: product classification, distribution discipline and post-market accountability. Products are being regularly assessed based on their ingredients, intended use, route of administration, and claims, rather than relying solely on how they are described by the manufacturers, importers or marketers. These developments appear to reflect a cohesive and targeted enforcement strategy rather than a series of isolated regulatory events.

Recategorization of Liquid Oral Syrups 

The most recent and commercially significant intervention concerns liquid oral syrup formulations. Through the Drugs (Fifth Amendment) Rules, 2026,[1] the Central Government has removed over-the-counter treatment previously available to such formulations and mandated that they be sold only on prescription.

Historically, certain cough, cold, and fever preparations were treated as ‘household remedies’ and distributed through limited non-pharmacy channels, particularly in rural areas lacking licensed chemists. This flexibility was enabled through Schedule K of the Drugs Rules, 1945 (‘Rules’)[2], which carved out exemptions from standard licensing requirements. The omission of ‘syrups’ from this framework fundamentally alters their regulatory status, effectively eliminating informal distribution channels and mandating sale through licensed pharmacies. The product will now be subject to the full rigours of Chapter IV of the Drugs and Cosmetics Act, 1940 (‘D&C Act’), which were previously relaxed, including the requirement to undertake sale, stocking and distribution only under valid licences as prescribed under the Rules.

The amendment has been positioned as a necessary public-health measure aimed at addressing misuse, overconsumption, and potential toxicity of certain cough and cold formulations.[3] The move also reflects a broader policy shift toward ensuring traceability, accountability, and pharmacist supervision in drug dispensing, thereby reducing the risks associated with unregulated sale and improving pharmacovigilance outcomes.

With this amendment, distribution practices may now require recalibration to avoid stock movement through unauthorised channels. This shift imposes heightened compliance obligations across the supply chain, requiring manufacturers as well as distributors to ensure that all downstream buyers hold valid drug licences,[4] maintain prescribed records, and, where applicable, restrict sale to prescription-based dispensing. Any non-compliance at any level would trigger potential penal consequences.

For enterprises with large syrup portfolios or high dependence on semi-urban and rural channels, the commercial impact could be significant as the change may require companies to revisit stockist arrangements, rural distribution models, e-pharmacy workflows, prescription controls, as well as downstream contractual obligations. 

Injectable Products and Limits of Cosmetic Classification

In the premium wellness, aesthetic and anti-aging segment, the CDSCO had issued a significant clarification that formulations intended for administration through subcutaneous, intramuscular, or intravenous routes cannot be classified, registered, or imported as ‘cosmetics’.[5] Under the D&C Act,[6] cosmetic is limited to products applied externally to the human body for cleansing, beautifying, promoting attractiveness, or altering appearance. With this clarification, CDSCO has drawn a contradiction between cosmetics and products administered through invasive routes, highlighting that the latter inherently invokes pharmacological considerations, bringing them squarely within the regulatory domain of drugs. 

This directive has far-reaching consequences for businesses dealing in injectable skin boosters, infusion-based wellness products, anti-aging injectables, glutathione or vitamin infusions, mesotherapy products, and similar aesthetic or wellness offerings.[7] Depending on their route of administration, such products are now likely to be assessed through a drug-regulatory lens going forward. This interpretation of what qualifies as cosmetic may also be invoked to regulate a broader set of products in the wellness and aesthetic industry, including transdermal delivery systems (such as patches with active ingredients), microneedling serums intended for dermal infusion, topical products, oral supplements, etc. 

The determination that such products fall outside the scope of cosmetics will not only dictate product registration. These products would become subject to the full spectrum of regulatory requirements applicable to drugs, including licensing, labelling, testing, import approvals/ No-objections, and conditions governing administration and distribution, both for import as well as domestic supply.

Intensified Oversight in Quality Governance

Vide Circular dated 10 June 2026,[8] CDSCO has directed strict adherence to safety standards and labelling requirements for all imported and domestically manufactured hair colour cosmetic products.[9] Specifically, the Circular requires hair cosmetic manufacturers of hair dyes to ensure conformity to IS 4707 (Part 1 and Part 2) governing permissible and restricted ingredients, as well as IS 8481 which specifically governs hair dye formulations. It further emphasises adherence to labelling requirements under Rule 34 (Manner of Labelling) and Rule 37 (Labelling of hair dyes containing dyes, colours and pigments) of the Cosmetic Rules, 2020 (‘Cosmetic Rules’) including disclosure of ingredients, directions for use, mandatory warning statements, and patch test instructions.

Importantly, the Circular also reinforced that any changes or revisions to label text or layout, active ingredient concentration, or manufacturing specifications must be duly reported to the relevant licensing authority prior to commercial distribution in accordance with Rule 15(2) and Rule 26(k) of the Cosmetic Rules. 

CDSCO through its Circular dated 3 June 2026[10] also obligates drug manufacturers to establish a dedicated, internal Pharmacovigilance Unit managed by qualified safety officers to track, log, and report Adverse Drug Reactions directly to the National Coordination Centre of the Pharmacovigilance Programme of India. This mandate came from Schedule M of the Drugs Rules, 1945.[11]

While these requirements are not new, both Circulars signal a shift from static compliance at the point of licensing to an ongoing, lifecycle-based regulatory obligation. For hair cosmetic as well as drug industry, this effectively raises the compliance threshold—transforming existing obligations into active adherence.

Industry Impact and the Way Forward

The above-mentioned developments are significant because they extend to product strategy, distribution models, supply-chain governance, digital sales practices, and brand positioning. Businesses can no longer rely on commercial characterisation or branding to determine regulatory treatment. Instead, observance of statutory definitions and requirements will dictate market viability.

Accordingly, marketing functions must also be apprised of these evolving requirements to ensure that compliance considerations are embedded in labels, packaging, and media or digital advertising, avoiding any misalignment with regulatory classifications or claims.
 

Deficiencies in fulfilling regulatory compliance can no longer be viewed as merely technical lapses—they carry the potential for significant enforcement actions, operational disruption, and reputational risk. Recent action by the Maharashtra FDA, including seizure of cosmetic products in Mumbai for misleading claims and labelling gaps, shows a more proactive enforcement approach.[12] As such, operational complacency is no longer an option. For those operating across multiple product categories, manufacturing arrangements, and distribution channels, the need for integrated frameworks is more critical than ever.

Conclusion

India’s regulatory landscape for drugs and cosmetics is undergoing a structural shift from flexibility to control. The earlier tolerance for ambiguous product positioning, informal distribution practices, and loosely governed claims is giving way to closer regulatory oversight. Given the constant evolution of the sector, companies should expect further tightening of governing frameworks, expanded enforcement drives, and potentially stricter labelling laws in the coming quarters. 

The key takeaway is that compliance must be treated as a continuing obligation. Proactively evaluating product portfolios, regulatory classifications, labelling practices, and distribution frameworks will help ensure alignment with the evolving compliance landscape. This assumes added significance in light of the increasing risk of adverse regulatory consequences, including monetary penalties, product seizures, suspension or cancellation of licences, and reputational harm.

[The authors are Partner and Associate, respectively, in Regulatory practice at Lakshmikumaran & Sridharan Attorneys, New Delhi]

[1] Gazette Notification G.S.R. 477(E) dated 9 June 2026

[2] S.No. 13, Item (7)

[3] No More Over-The-Counter Cough Syrups: Why Government Took the Big Step, Hindustan Times (June 16, 2026). Available here. 

[4] Section 18(c), D&C Act

[5] Public Notice dated May 18, 2026 (F.No. COS-12/1/2026-eoffice). Available here. 

[6] Section 3(aaa)

[7] No Cosmetic Permitted as Injection Under Law: What It Means for Botox Shot You Were Planning?, Indian Express (May 21, 2026), Available here. 

[8] Available here.

[9] lS 4707 (Part I & Part 2) and  lS 8481

[10] Available here.

[11] Para 6.11, Schedule M

[12] FDA Cracks Down on Misleading Cosmetic Products, Hindustan Times (June 15, 2026) Available here.