A Loan License allows a medical device manufacturer who does not own a factory to use another licensed firm’s manufacturing premises to make or assemble devices legally under their own brand. Under the Medical Devices Rules, 2017, this is a legally recognised licensing pathway under MDR 2017 — giving startups, brand owners, and growing companies a route to market without the capital investment and timeline of building their own manufacturing facility.
A Loan License — sometimes called a Loan Licence — is a permit issued under the Medical Devices Rules (MDR), 2017 that authorises a company (the loan licensee) to manufacture medical devices for commercial sale or distribution at the premises of another licensed manufacturer (the licensor).
In simple terms:
Critical distinction: A loan licence is not the same as outsourcing or contract manufacturing. Under contract manufacturing, the manufacturer’s own licence covers production. Under a loan licence, the loan licensee holds their own separate CDSCO licence — with full regulatory accountability — and the licensor’s facility is simply where production physically takes place. The loan licensee remains independently responsible for regulatory compliance, product quality, and post-market obligations.
The loan licence model is particularly suitable for:
Many small firms or startups cannot build full plants early. A loan licence lets them launch products legally by using another firm’s facility — while they develop plans for their own manufacturing unit.
Companies that own device IP, clinical data, and commercial relationships — but want to outsource production — can legally market under their own brand through a loan licence.
Foreign companies wishing to produce in India for domestic sale — without setting up their own facility — can partner with an Indian licensed manufacturer and obtain a loan licence.
Established businesses expanding into new device categories who need production capacity before their own facility is ready — or who want to test market demand before committing to in-house manufacturing.
Healthcare institutions that want to develop private-label medical devices or custom devices — and sell under their own name — without building a manufacturing facility.
R&D organisations or academic institutions that have developed a device and want to commercialise it — by licensing their technology while using an existing manufacturer’s facility.
Under MDR 2017, applications for medical device loan licences are submitted through the SUGAM portal.
For Class A and B devices, the application is filed in Form MD-4 and the licence is granted in Form MD-5 by the State Licensing Authority.
For Class C and D devices, the application is filed in Form MD-8 and the licence is granted in Form MD-10 by the Central Licensing Authority (CDSCO).
Device Class | Application Form | Licence Issued | Licensing Authority |
Class A and B | Form MD-4 (Loan Licence application) | Form MD-5 (Loan Licence) | State Licensing Authority (SLA) |
Class C and D | Form MD-8 (Loan Licence application) | Form MD-10 (Loan Licence) | CDSCO — Central Licensing Authority (CLA) |
Key rule: The licensor (the facility providing premises) must hold a valid manufacturing licence for the same device category as the loan licensee intends to manufacture. You cannot use a facility licensed for Class A devices to manufacture a Class C device under a loan licence arrangement.
Factor | Own Manufacturing Licence | Loan License |
Own facility required | Yes — must own or lease a GMP-compliant facility | No — use licensor’s facility |
Capital investment | High — facility setup, equipment, staffing | Low — no facility CAPEX |
Time to first production | Longer — facility must be built/fitted before licence | Faster — use existing licensor facility |
Regulatory responsibility | Full — you control facility and compliance | Full — loan licensee bears all device responsibility |
Quality control dependency | Independent — you set and control QMS | Shared — QMS spans both entities; careful partner selection critical |
Device Master File (DMF) ownership | Owned by you | Must be owned by loan licensee — not licensor |
Best for | High-volume, established manufacturers; long-term market commitment | Startups, brand owners, new device categories, market entry phase |
Confirm your device’s classification under the First Schedule of MDR 2017 — Class A, B, C, or D. This determines whether your loan licence application goes to the State Licensing Authority (Class A/B) or CDSCO Central Licensing Authority (Class C/D), which application form to use, and the applicable fee structure. Getting classification right at this stage prevents costly rework.
You must partner with a factory that has a valid manufacturing licence for the same device category. Verify on SUGAM portal that the licensor’s licence is active, covers your device class, and is for the same type of device. Assess the licensor’s GMP compliance, QMS documentation, equipment adequacy, and regulatory track record. A poor licensor choice can jeopardise your own licence and product quality — due diligence here is not optional.
Prepare and execute a formal written agreement between you (loan licensee) and the licensor. The agreement must clearly cover: production responsibilities, QMS obligations, regulatory accountability, quality control rights, access for inspections, and what happens if the licensor’s licence is suspended or cancelled. This agreement is a mandatory document in your licence application — and its quality affects both regulatory compliance and commercial protection.
As the loan licensee, you must own and prepare the Device Master File — not the licensor. The DMF includes: device description, design specifications, materials, intended use, manufacturing process description, labelling, risk analysis (ISO 14971), performance testing data, and standards compliance declaration. The device master file must be prepared and all the relevant documents pertaining to the product need to be provided by you — this is a non-negotiable loan licence requirement.
Register on the SUGAM portal at cdscoonline.gov.in. Select Form MD-4 (Class A/B) or Form MD-8 (Class C/D). Fill in all required details, upload the complete document dossier, and pay the applicable government fee online. Ensure every data field matches your supporting documents — any mismatch triggers a CDSCO query. Note your application acknowledgement number after submission.
CDSCO or the State Licensing Authority inspects the licensor’s facility — where production will physically take place. Inspectors check: GMP and QMS compliance, equipment adequacy, sterility controls (if applicable), qualified technical staff, and documentation systems. Both you (as loan licensee) and the licensor must be prepared for this visit. A failed inspection can result in licence refusal for both parties.
Once all documents, inspection, and contract are satisfactory, CDSCO or the SLA grants the loan licence — in Form MD-5 (Class A/B) or Form MD-10 (Class C/D). You can then legally begin manufacturing under the licensor facility. The loan licence is valid for 5 years from the date of issue and must be renewed before expiry.
Device Class | Application Fee (per site) | Per Device Fee | Licensing Authority |
Class A and B | ₹5,000 per manufacturing site | ₹500 per medical device | State Licensing Authority |
Class C and D | ₹50,000 per manufacturing site | ₹1,000 per medical device | CDSCO (Central) |
Note: Fee structures are subject to revision. Verify current applicable fees before submitting application. Applicable retention or renewal-related government fees must be paid periodically to maintain licence validity as per prevailing MDR provisions.
A significant 2025 clarification has narrowed the scope of when a loan licence is required for manufacturing:
As per DTAB’s 92nd meeting (April 24, 2025) and subsequent CDSCO FAQ clarifications: a company wanting to outsource sterilization no longer needs a separate loan licence for that sterilization step — provided the sterilization facility already holds a valid manufacturing licence under Form MD-3 or MD-9.
What this means in practice:
Mistake | Impact | Prevention |
Licensor’s licence does not cover same device category | Application rejected — fundamental eligibility failure | Verify licensor’s licence scope on SUGAM before signing any agreement |
DMF owned by licensor, not loan licensee | CDSCO query — loan licensee must own all technical documentation | Ensure DMF is prepared by and registered to the loan licensee from day one |
Loan licence agreement too vague or missing key clauses | CDSCO query — agreement must cover QMS, inspection access, liability | Prepare agreement with legal and regulatory input — not a generic template |
Licensor’s facility fails GMP inspection | Loan licence refused — production cannot begin | Audit licensor facility before application — not after inspection notice |
Wrong application form selected (MD-4 vs MD-8) | Wrong authority receives application — rejection or reassignment delay | Confirm device class and correct form before filing |
Manufacturing started before loan licence issued | Regulatory violation — penalties under MDR 2017 | Never manufacture for commercial sale without valid loan licence |
Licensor’s licence suspended post loan licence grant | Your production is also suspended — cannot manufacture | Monitor licensor’s licence status regularly; include continuity clauses in agreement |
Can I sell under my own brand with a loan licence?
Yes — this is the primary purpose of a loan licence. The product is marketed under the loan licensee’s brand name, with the loan licensee’s details on the label. The licensor is the manufacturer — but the loan licensee is the legal responsible party for the device in the Indian market.
What happens if the licensor’s manufacturing licence is suspended?
If the licensor’s licence is suspended or cancelled, your loan licence effectively becomes inoperative — you cannot manufacture at a facility that no longer holds a valid licence. This is why licensor due diligence and continuity planning in the loan licence agreement are critical. Monitor your licensor’s licence status actively and include clauses addressing this risk in your agreement.
Can I have multiple licensors under one loan licence?
Generally, a loan licence is specific to a particular licensor facility. If you want to manufacture at multiple facilities, separate loan licence applications are typically required for each facility — each with its own agreement, inspection, and documentation. Consult with a regulatory expert on the specific structure for your situation.
Does a loan licensee need to have its own qualified technical person?
Yes — the loan licensee must have a qualified technical person to oversee regulatory compliance and quality for the devices manufactured under the loan licence. The licensor’s technical staff manage the manufacturing operations, but the loan licensee bears regulatory responsibility and must have the internal competence to manage it.
Is ISO 13485 mandatory for the licensor facility?
ISO 13485 is referenced as a compliance requirement for the loan licence arrangement. While ISO 13485 is not explicitly mandatory under MDR 2017 for all manufacturing licences, it is strongly preferred by CDSCO for Class C and D devices — and for loan licence arrangements where the licensor’s QMS quality directly affects the loan licensee’s regulatory compliance.
How long does a medical device loan licence take to obtain?
For Class A/B devices via State Licensing Authority: typically 3–6 months from a complete submission. For Class C/D devices via CDSCO: typically 6–12 months, including facility inspection. Incomplete applications or facility inspection failures significantly extend these timelines. Starting with a complete, accurate dossier and a compliant licensor facility is the most effective way to minimise the timeline.
