Know About Third Party Pharma Manufacturing in India

Third Party Pharma Manufacturing in India – Third party pharma manufacturing Also known as contract manufacturing, white label manufacturing and product-to-product manufacturing; third party manufacturing has become a popular way of manufacturing products in the pharmaceutical industry of India including herbal and Ayurvedic industry. If you are new and are planning to enter the Ayurvedic or herbal pharmaceutical manufacturing, or you are planning to expand your business, the best way to do so is contract manufacturing.

What is Third Party Manufacturing or Contract Manufacturing?

According to the definition by Business standard, third party manufacturing is the “production of goods by one firm, under the label or brand of another firm.”

Third Party Pharma Manufacturing

As is elicited in the definition, a firm enters into an agreement with the manufacturer to manufacture its product of choice. Therefore, the role of the manufacturer is limited to manufacturing the product using its own resources such as raw material, manufacturing facility/unit and personnel. The firm (client) can provide its own composition, brand name, packing etc.

Advantages of Third Party Pharma Manufacturing in India

Before getting to the advantages of third party pharma manufacturing let us first understand which the three types of manufacturing available in India are.

Types of Ayurvedic Manufacturing:

There are three options if you want to manufacture your own herbal/ ayurvedic product line.

1. Set up an Ayurvedic Manufacturing Unit:

You need  to set up a manufacturing unit that complies with Good manufacturing practices(GMP) described in Schedule T of Drug and Cosmetic Act, 1940 in order to obtain a license for manufacturing unit from Ayush Department of concerned state.  You have a complete ownership of the unit and your products.

You can then manufacture, promote and market your products.

The products will bear your company/firm name against ‘manufactured by’ and ‘marketed’ by sections on the product.

You can manufacture a variety of products ranging from classical ayurvedic preparations, ayurvedic proprietary medicines to ayurvedic personal care products (Including herbal cosmetics). Before manufacturing, you have to take approval of the product from AYUSH department of concerned state.

2. Use an Existing Manufacturing Facility.

Since setting up a manufacturing unit demands investment of time and money, you can obtain a loan license from AYUSH department for using an existing licensed Ayurvedic manufacturing facility, (if you have paucity of both).

It is like renting the facility of the manufacturer. You use their facility, their staff and may use their raw material (You can also use your own raw material). You can either manufacture your product yourself or may appoint persons to oversee the manufacturing.

This way, the product will bear the name of your company in both ‘marketed by’ and ‘manufactured by’ sections. But the address of the manufacturing facility you have rented must be shown against ‘manufactured by’ section.

In this method, you bear the liability of the quality and safety of the product. This method can be chosen by Ayurvedic marketing companies who want to get their products manufactured on large scale and on regular basis.

3. Enter into Third Party Manufacturing Agreement.

If you do not have the resources to set up an ayurvedic manufacturing unit, and do not want to enter into loan licensing method, there is an easier and hassle-free way to get your own product line manufactured.

In this, you select the best ayurvedic manufacturer, finalize the terms (regarding product composition, brand name, packing, time of delivery and price) and enter into agreement. The manufacturer then manufactures the product and delivers you the product. Now, you can further market and supply the product.

Benefits of Third Party Pharma Manufacturing or Contract manufacturing:

Third party manufacturing has the following advantages:

  • It is the easiest way as compared to the other two methods. It does not require you to worry about the approval and manufacturing of the product.
  • It is particularly of great use to the persons who are new to the sector or who those who want to expand their business without getting into the manufacturing sector.
  • It is a cost-effective method. You do not have to pump large amount of money and time on setting up the unit and maintaining staff.
  • You have the flexibility of choosing the right Ayurvedic manufacturing anywhere in India. This is not the case in loan license. If you are an Ayurvedic marketing company based in Punjab, wishing to take a loan license, you have to get it in the same state. But, in case of third party manufacturing you can get it done anywhere, say for an example from best ayurvedic manufacturing companies in Haryana.
  • You are also saved from doing the tedious job of getting the documentations and legal aspects complied.

When should You go for Third Party Pharma Manufacturing?

  • If you are an entrepreneur, or new to the industry and want to enter the industry.
  • If you are low on resources and money.
  • If you want to expand your marketing business but do not want to enter into manufacturing.
  • If you are an Ayurvedic manufacturer already, but are not able to cope up with the increased demand.
  • If you want best quality ayurvedic products availing the best-in –class manufacturing facility of the best ayurvedic manufacturing companies in India
  • If the demand of your products is not regular. For example, Ayurvedic medicine for dengue is on high demand in monsoon and post-monsoon season, whereas there is no demand at all in other seasons.

For the aforementioned reasons, the best option is to opt for third party manufacturing.

Future of Third Party Pharma Manufacturing in India

According to a 2016 report by Frost and Sullivan, the current size of Ayurveda market in India stands at USD 3 billion and is currently growing at CAGR of 15-16%. The share of Ayurveda products in the Ayurveda industry is 75 % whereas services comprise the rest 25 %. More and more people are turning towards organic, chemical free, natural herbal products. The trend is not only seen in India but in the whole world. The government has revved up its efforts to facilitate the export of ayurvedic and herbal products from India.  SO, there is a hope of more and more avenues opening up due to the combined effect of increased demand and Govt. support.

More and more big manufacturing companies like Patanjali are outsourcing their work to third party manufacturers due to huge surge in demand of Ayurvedic products. There are many micro, small and medium ayurvedic manufacturing companies that are offering their services at affordable rates. 

The early bird will catch the worm. Those who grab the opportunity now, stand a good chance of becoming successful in their endeavors. Third party manufacturing is by far the easiest way to jump into the world of Ayurvedic industry.

Tips to be Remembered Before Hiring a Third Party Manufacturer

Following are certain tips to be kept in mind before hiring a third party manufacturer:

  • Company must be certified by AYUSH Department of the state.
  • Company must be GMP compliant.
  • Any other credentials that company has acquired serve a plus point.
  • Company should have a good business profile and has a good history of dealing with clients
  • The feedback of products manufactured by the company should be good.

Find the Best Third Party Pharma Manufacturing Companies in India.

There are many Ayurvedic manufacturing companies in India that offer third party manufacturing.  Many of them are situated in Haryana and Chandigarh.

Chandigarh has many Ayurvedic manufacturing companies. AlnaVedic is one such company based in Chandigarh that owns a best-in-class Ayurvedic manufacturing unit. It manufactures Ayurvedic medicines, herbal cosmetics and personal care products. It offers services of contract manufacturing/white –label manufacturing/ private label manufacturing to interested parties. The Alnavedic team also provides guidance regarding compostion of products, their branding and trademark related issues. Quality control team ensures the quality of the product is uncompromised. We stand firm on our commitment to assist you to develop your brand and help it become unparalleled in the country.


Now you know how third party pharma manufacturing concept works in India, Get connected with us for any kind of manufacturing of Ayurvedic or herbal medicines. Call: +91- 9041041323

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