Krishna
Founder, ShylCare
A friend of mine opened a pharmacy in Kharghar last year. Pharmacist by qualification, worked at a chain for four years, knew the business inside out. What surprised him wasn't the clinical side — it was the paperwork. Three months in, he told me: "I spend more time on compliance and inventory than I do actually serving customers."
If you're planning to start a pharmacy in India, this is what nobody tells you upfront: the operational and regulatory side is more complex than the retail side. Let me walk through what you actually need — licences, software, and the day-one decisions that matter.
Before you stock a single strip of paracetamol, you need these:
Drug Licence (Form 20 & 21). This is your primary licence from the State Drug Controller, issued under the Drugs and Cosmetics Act. Form 20 is for retail sale, Form 21 is for wholesale (you might need both if you plan to supply to clinics). The process involves applying to your state's FDA, an inspection of your premises, and verification that you have a qualified pharmacist. Timeline: 30-90 days depending on the state. Cost: ₹3,000-6,000 in fees, though you might spend more on getting the premises inspection-ready.
You'll need a qualified pharmacist — either you hold the degree yourself, or you employ one. The pharmacist's registration with the State Pharmacy Council must be current. This isn't optional; operating without a qualified pharmacist on premises is a criminal offence under the D&C Act.
GST Registration. Mandatory if your turnover exceeds ₹40 lakh (₹20 lakh for some states), but practically speaking, get it from day one. Your suppliers will need your GSTIN for invoicing, and operating without it limits who will supply to you. Medicines fall under multiple GST slabs — 5%, 12%, 18% depending on the formulation — so your billing system needs to handle item-level tax rates.
Shop and Establishment Registration. From your local municipal corporation. Straightforward, low cost, but don't skip it — it's a prerequisite for other registrations.
FSSAI Licence. Only if you plan to sell food supplements, health foods, nutraceuticals, or anything classified as food. If you're sticking to scheduled drugs and OTC medicines, you don't need this immediately. But most pharmacies eventually stock protein powders, health drinks, and supplements — at which point you'll need an FSSAI registration (basic registration for turnover under ₹12 lakh, state licence above that).
Narcotics Licence. Only if you plan to stock Schedule H1 or Schedule X drugs (certain controlled substances). Most retail pharmacies start without this and add it later if needed.
Here's where I see new pharmacy owners make one of two mistakes: either they use no software at all (pure manual billing with a receipt book), or they buy an expensive pharmacy management system on day one that they're not ready to use.
The first month trap. Manual billing works fine for about three weeks. You know your stock because you just ordered it. You remember prices because you only have 200-300 SKUs. You track expiry mentally because everything is fresh.
Then month two arrives. You've done 1,500 transactions. You have no idea what's running low. Three items expired without you noticing. A customer returns saying they were overcharged, and you can't find the bill. Your CA asks for a GST-compliant sales register and you hand over a notebook.
This is when most pharmacy owners panic-buy software. Don't wait for the panic.
What pharmacy software needs to do:
Inventory management with batch and expiry tracking. Every medicine has a batch number and an expiry date. Your software must track at this level, not just at the SKU level. When you sell a strip of Amoxicillin, it should deduct from the specific batch you dispensed — first-expiry-first-out (FEFO). Expiry alerts (30, 60, 90 days out) are essential; they're the difference between returning stock to the distributor for credit and throwing it away.
GST-compliant billing. Each item has its own GST rate. Your bill needs to show the correct tax breakup. At month end, you need GSTR-1 data — item-wise, rate-wise, customer-wise. If your billing software can't generate this, you're paying your CA to do data entry.
Purchase order and supplier management. You'll have 5-15 regular distributors. When stock runs low, you need to generate a purchase order, receive goods against it, and match the supplier's invoice. The margin between your purchase rate and MRP is your livelihood — you need to see it clearly for every item.
Smart reordering. After a couple of months of sales data, the software should tell you what to reorder and roughly how much. Not a complex demand forecasting algorithm — just: "You sell about 40 strips of this per month, you have 12 left, maybe order some."
Drug schedule compliance. Schedule H and H1 drugs require a prescription. Your software should flag these at the billing counter — not to be annoying, but to protect your licence.
A few practical decisions to make before you open:
Arrange your store by category and alphabetically within each category. Tablets, syrups, injectables, surgical, OTC, personal care. Within tablets, alphabetical by brand. This sounds obvious but most new pharmacies arrange by distributor (because that's how the stock arrived) and regret it within a week.
Enter your opening stock properly. This is tedious — every item, batch, expiry, quantity, purchase rate, MRP. It takes a full day for a small pharmacy. Do it anyway. If your software's opening stock is wrong, every report it generates afterward is wrong.
Set up your top 100 items first. You'll stock 800-1,500 SKUs eventually. On day one, set up the 100 fastest-moving items properly — with correct GST rates, manufacturer, pack size. Add the rest as they come in with new purchase orders.
One thing worth knowing: platforms like ShylCare offer a marketplace where pharmacies can receive prescription orders from nearby hospitals and clinics on the platform. The patient gets their prescription digitally, and if they choose to order medicines for delivery or pickup, the order routes to a partner pharmacy.
This isn't going to replace your walk-in business — that will always be your core. But it's an additional channel that requires zero marketing spend. You receive orders, fulfil them, and earn your margin. For a new pharmacy still building its customer base, that extra volume matters.
Starting a pharmacy in India is operationally demanding but financially sound if you manage inventory and compliance well. The margins are thin (15-20% on most medicines) but volume makes up for it, and the demand is recession-proof.
The two things that will determine whether your pharmacy thrives or struggles: inventory discipline (never run out of fast movers, never let stock expire) and billing accuracy (every rupee accounted, every GST return clean). Both of these are fundamentally software problems.
Don't start with pen and paper planning to "upgrade later." Start with software on day one. Your future self — and your CA — will thank you.
Curious how ShylCare fits your setup? Let's talk.
We'll walk through your actual workflows — no generic demo, no slide deck.