India has a federal structure of government and different subject matters for legislation come under legislative competencies of the Centre and the 28 States. While public health is in the State list, drugs is in the concurrent list i.e., both the Centre and the State can legislate. Therefore, while the marketing approval is given by the Drug Controller General of India (hereinafter DCGI), the manufacturing license is granted by the State Drug Controllers. Once the proposed Central Drugs Authority of India with the necessary amendments to the Drugs and Cosmetics Act comes into force, the present system of grant of manufacturing licenses by the States would be replaced by a complete central licensing system under the Union Government in a phased five year transition.

For getting a new drug product registered for marketing approval in India, one needs the following:
Application for permission to import a new drug is made under Form 44 read
with Rule 122A (with a fee of INR 50,000/-) of the Drugs and Cosmetics Rules, 1945 (hereinafter referred to as the Rules). Rule 122 A gives the DCGI the discretion to waive, in public interest, the requirement of submitting local clinical trials and other data on the basis of data available from other countries. In practice, however, if a new drug product approved and marketed in another as less as 6 months, the DCGI as a rule grants marketing approval to the new drug applicant in India. Only a limited Phase III trials of 100 patients in 3-4 centres is required to be conducted in India to establish efficacy and safety of the drug in Indian patients before permission to market the drug in India is granted.

Application for permission to manufacture new drugs for sale as well as for import a bulk drug substance and grant of approval to manufacture its formulation, is to be made under Form 44 read with Rule 122 B of the Rules (with a fee of INR 50,000/-). The Application for manufacture of new drug must be accompanied with data including the results of clinical trials carried out in India, as required under Appendix I of Schedule Y and in the format given in Appendix II. When applying for approval to manufacture of a new drug to the State Drug Controller, an applicant must produce evidence that the DCGI has indeed given a marketing approval. A similar power of waiver from submitting  results of local clinical trials in public interest is vested with the DCGI on the basis of data available from other countries. Any subsequent application for the same drug made after a year of the grant of approval for the manufacture of the new drug, needs to prove bioequivalenvce and bioavailibity and provide limited toxicity data.