How to Choose a Contract Manufacturer in India: A No-Nonsense Guide

India has over 3,000 pharmaceutical companies and 10,500+ manufacturing units. The contract development and manufacturing (CDMO) market was valued at roughly $18 billion in 2023 and is projected to reach $44 billion by 2030, according to Bain & Company. Every year, hundreds of domestic and international brands choose Indian contract manufacturers for the first time. Many of them get it wrong.

Getting it wrong does not always mean your product is bad. Sometimes it means your product is delayed by six months because of regulatory misunderstandings. Sometimes it means you discover, mid-production, that your manufacturer cannot hold specification on your critical quality attributes. Sometimes it means an FDA warning letter to your contract site takes your entire product line off the US market.

This guide is about avoiding those outcomes. It is long. It is detailed. That is because the decision is consequential and the details matter.

First, Understand the Three Legal Models

Before you contact a single manufacturer, you need to understand the licensing structures under Indian drug law. This is not optional background reading. The model you choose determines who is legally responsible for product quality, who controls the manufacturing license, and who faces the regulatory consequences if something goes wrong.

The loan license distinction is critical. Under a loan license (Form 25A/28A), you -- the brand owner or "loanee" -- hold the manufacturing license and are legally responsible for product quality. You appoint the technical staff. You are answerable to the drug inspector. The contract manufacturer provides the facility, equipment, and operators, but the regulatory accountability sits with you. If a batch fails stability, if there is a recall, if an inspection uncovers problems -- it is your license on the line.

Under the third-party (P2P) model, the manufacturer holds the license and bears quality responsibility. You are essentially purchasing a finished product and marketing it under your brand. You have less control but also less regulatory exposure. Your QA involvement is typically limited to incoming quality checks and specification agreements.

Most startups and smaller brands in India operate under loan license. Most international companies purchasing from Indian manufacturers use the third-party model. Know which one you need before you start talking to manufacturers.

Finding Manufacturers: Where to Start

The obvious sources: industry directories, trade shows (CPhI India, CPHI Worldwide, India Pharma), and word of mouth. The problem with these is signal-to-noise ratio. At CPhI India, every booth claims world-class quality. On general B2B platforms, you cannot distinguish between a 500-bed tablet facility with EU GMP and a 10-person operation that relabels products in a rented warehouse.

Start with specifics. What dosage form? What batch size? What certifications does your target market require? You can search our directory by dosage form, certification (WHO-GMP, EU GMP, US FDA), production capacity, and location. That will give you a shortlist. From there, the real work begins.

The Geography of Indian Contract Manufacturing

India's pharma manufacturing is concentrated in a handful of hubs. Location matters because it affects your logistics costs, regulatory environment (different State FDAs have different inspection intensities), and access to skilled labor and raw materials.

A manufacturer in Baddi producing tablets for the domestic market will have a very different cost structure and regulatory profile than a Hyderabad-based API+formulation facility exporting to the US. Match the hub to your needs.

Minimum Order Quantities: What to Expect

Every first-time buyer asks about MOQs. The answer depends on the dosage form, the manufacturer's equipment, and how much they want your business. Here are rough benchmarks:

Do not try to negotiate a manufacturer down to a fraction of their normal MOQ. If their tablet press is set up for 200,000-tablet batches and you want 10,000, the economics do not work for either party. You will pay a disproportionate cost for changeover time, cleaning validation, and QC testing on a tiny batch. Find a manufacturer whose equipment scale matches your volume.

Pricing: What Drives Costs

Raw materials typically account for about two-thirds of the total API cost. India imports roughly 70% of its APIs from China, which means your input costs are exposed to Chinese supply dynamics, currency fluctuations, and geopolitical risk. The API for something like paracetamol or metformin is basically a commodity. Specialty APIs (oncology, hormones, controlled substances) are a different game with far fewer suppliers and much higher costs.

For the manufacturing cost itself, a benchmark figure for a cGMP tablet facility in India is around $0.01 per tablet. That includes direct labor, utilities, depreciation, and quality control. It does not include raw materials, packaging, stability studies, or regulatory costs. India is roughly 33% cheaper than the US for pharmaceutical contract manufacturing on a like-for-like basis, though the gap narrows as you move up the complexity curve toward biologics and sterile injectables.

Be suspicious of any quote that is dramatically below market rates. There is a floor to what compliant manufacturing costs. If someone is offering tablets at a fraction of what competitors charge, either they are cutting corners on quality, or they are quoting without including testing, stability, or regulatory costs that you will be hit with later.

Timeline: From First Call to First Commercial Batch

This takes longer than you think. Even for a straightforward oral solid dosage form with an established formulation, expect 4-6 months from initial inquiry to the first commercial batch leaving the dock.

Complex products include modified-release formulations, sterile injectables, combination products, or anything requiring process validation from scratch. If you are transferring a product from another manufacturer (site transfer), add time for comparative dissolution, bioequivalence considerations, and regulatory variation filings.

Red Flags: What Should Make You Walk Away

In ten years of watching pharma contract manufacturing deals go sideways, certain patterns repeat. Here are the warning signs that a manufacturer is not worth your time or risk.

• Reluctance to allow unannounced audits. Any manufacturer who insists on weeks of advance notice before you can visit the facility is hiding something. Good manufacturers will let you walk in with reasonable notice (24-48 hours). Great ones will let you show up unannounced. If the answer is "we need 3 weeks to prepare," that tells you what the facility looks like when nobody is watching.
• Paper-based records without audit trails. In 2026, if a manufacturer is running their entire batch record system on paper with no electronic backup, no audit trail, and no data integrity controls, they are either too small to be taken seriously or they have chosen not to invest in quality systems. Either way, you are exposed.
• Unusually low pricing. If one quote is 40% below every other quote you received for the same product, it is not because that manufacturer found a magical efficiency. It is because they are cutting corners on raw material quality, skipping validation steps, or not including costs that will surface later.
• High QC/QA staff turnover. Ask how long the QC head and QA head have been with the company. If the answer is "six months" and the person before them lasted eight months, that facility has a quality culture problem. Experienced QC/QA professionals leave when they are pressured to approve things they should not approve.
• No CAPA system. Ask to see their CAPA log. If they do not have one, or if every single CAPA has "retrain operator" as the corrective action, their quality system is theater. A real CAPA system has root cause investigations, effectiveness checks, and trend analyses.
• No stability data for their own products. If a manufacturer cannot show you stability data for products they are currently making, they are not conducting ongoing stability programs. That is a basic GMP requirement and a massive red flag.

Real Examples of What Goes Wrong

These are not hypothetical scenarios. These are real FDA enforcement actions against Indian manufacturers in the last two years.

Kilitch Healthcare, Navi Mumbai (Warning Letter, March 2024): FDA inspectors found that microbiology lab staff routinely fabricated environmental monitoring data. Samples were never collected, but results were entered into batch records as if they were. Batch records from March 2023 were being completed for the first time during the October 2023 inspection. The company recalled 27 eye drop products sold through CVS, Rite Aid, and Target. Placed on Import Alert 66-40.

Intas Pharmaceuticals, Ahmedabad (Warning Letter, July 2023): A QC analyst was caught pouring acetic acid over analytical balance slips and titration curves to destroy them. Plastic bags full of torn production records were found under a stairwell and on a truck outside the facility. Another analyst admitted to discarding balance printouts and not reporting all test results. Intas was a major generic chemotherapy supplier. The import alert contributed directly to oncology drug shortages in the United States.

Granules India, Hyderabad (Warning Letter, February 2025): At least 15 waste bags filled with torn CGMP records -- balance printouts, testing worksheets -- were found at the Telangana facility. Separately, bird droppings and feathers were found near air handling units. Birds were entering through gaps in exterior walls. The company's remediation (installing nets) was rejected by the FDA because the netting still allowed insects into the AHU area and no root cause analysis was performed.

These are cautionary tales, but they also demonstrate something important: even large, established manufacturers can have serious quality failures. Size and brand recognition are not proxies for quality. Your own audit is the only thing that matters.

10 Mistakes First-Time Buyers Make

1. Choosing on price alone. The cheapest manufacturer is almost never the best value. You save money upfront and spend it later on failed batches, delayed timelines, and regulatory problems.
2. Not understanding the licensing model. Signing a loan license agreement without understanding that you -- not the manufacturer -- bear regulatory liability. This catches people off guard when a drug inspector shows up.
3. Skipping the site audit. Reviewing documents remotely is not a substitute for walking the production floor. You learn more in four hours on-site than in four weeks of email exchanges.
4. Ignoring API sourcing. Your finished product is only as good as the raw materials going into it. Ask where the API comes from, who the approved vendors are, and what incoming testing is performed. With 70% of APIs imported from China, supply chain risk is real.
5. No written quality agreement. A supply agreement is not a quality agreement. You need a separate document that specifies responsibilities for change control, deviation handling, recall procedures, complaint management, and audit rights. Get this signed before a single batch is manufactured.
6. Underestimating technology transfer time. "Just send us the formula and we will make it" is not how this works. Even a well-documented formulation requires trial batches, equipment-specific process optimization, and analytical method transfer and verification. Budget time accordingly.
7. Not checking regulatory history. The FDA Warning Letters database is public. Import Alerts are public. The CDSCO WHO-GMP certified units list is public. There is no excuse for not checking whether your prospective manufacturer has a history of compliance failures. Ten minutes of research can save you years of problems.
8. Relying on a single manufacturer. If your one contract manufacturer has a quality issue, a fire, or a regulatory shutdown, your entire product supply goes to zero. For any product that matters to your business, qualify a backup site.
9. Not visiting during production. Your audit during the selection phase shows you a prepared facility. Visit again during your actual production run, unannounced if possible. What you see will be different.
10. Unclear product specifications. Vague specs lead to disputes. Define every quality attribute with specific limits, test methods, and sampling plans before manufacturing begins. Include packaging specifications, labeling requirements, and shipping conditions. Leave nothing to assumption.

How to Verify a Manufacturer Before You Commit

Due diligence is not glamorous. It is essential. Here is a practical verification checklist.

Check the FDA Warning Letters database. Go to fda.gov/inspections-compliance-enforcement-and-criminal-investigations/compliance-actions-and-activities/warning-letters. Search by company name. Warning letters are public record. An active warning letter does not necessarily mean you should avoid the manufacturer (companies can and do remediate), but you need to understand what happened and what was corrected.

Check FDA Import Alerts. The Import Alert list (fda.gov/industry/import-alerts) shows facilities whose products are subject to detention without physical examination. If your manufacturer is on Import Alert 66-40 (drugs manufactured under insanitary conditions) or 99-32 (drugs from facilities with significant GMP deficiencies), that is a serious problem.

Check the CDSCO WHO-GMP certified units list. Available at cdscoonline.gov.in. This confirms whether the manufacturer currently holds WHO-GMP certification. Note the certificate date and validity. An expired certificate that has not been renewed is a red flag.

Request their last three audit reports. A manufacturer with nothing to hide will share their most recent customer audit reports, internal audit reports, or regulatory inspection reports. If they refuse, ask why.

Talk to their existing customers. Ask the manufacturer for 2-3 references and actually call them. Ask about on-time delivery, batch rejection rates, responsiveness to complaints, and how the manufacturer handled the last deviation or OOS result.

Conduct your own site audit. There is no substitute for this. Bring a qualified auditor. Use a structured audit checklist based on WHO or PIC/S GMP guidelines. Pay attention to the production floor, the QC lab, the warehouse, and the water treatment plant. Look at operator behavior, not just equipment. Are people following gowning procedures? Are logbooks filled in contemporaneously or backfilled? Is the facility clean in the corners, not just the main corridor?

The Quality Agreement: What It Must Cover

A quality agreement is separate from your commercial supply agreement. It defines the quality responsibilities of each party. At minimum, it should cover:

• Roles and responsibilities for manufacturing, testing, and release
• Specifications for raw materials, in-process controls, and finished product
• Change control procedures (the manufacturer cannot change the API supplier, process parameters, or equipment without your written approval)
• Deviation and OOS investigation protocols
• CAPA requirements and timelines
• Recall procedures and responsibilities
• Complaint handling workflows
• Annual Product Quality Review (APQR) requirements
• Audit rights, including frequency and notice periods
• Data retention periods and access rights
• Stability study responsibilities

Do not accept a manufacturer's template quality agreement without reviewing and modifying it. Their template is written to protect them, not you. Have your QA team or regulatory consultant review it line by line.

A Note on Cost Benchmarking

When you request quotes from multiple manufacturers, you will see a range. That range is informative. Here is how to interpret it.

If you get five quotes and they cluster between Rs 2.00 and Rs 2.50 per tablet, with one outlier at Rs 1.20, the outlier is not a bargain. They are either using a cheaper (possibly non-pharmacopoeial) API source, skipping stability studies, or quoting a price that does not include testing costs they will invoice separately.

Similarly, if one quote is at Rs 4.00 and the rest are at Rs 2.00-2.50, the expensive manufacturer may be offering genuinely superior capabilities -- better documentation, faster turnaround, dedicated production lines, more extensive analytical testing. Or they may just be inefficient. Your audit will tell you which.

The 33% cost advantage India has over the US is real, but it is an average. For simple oral solids, the gap can be larger. For complex sterile products requiring specialized fill-finish equipment and cleanroom facilities, the gap narrows because the equipment and compliance costs are similar everywhere.

Making the Final Decision

After you have shortlisted, audited, and gotten quotes from 3-5 manufacturers, weight your decision across these factors:

1. Regulatory track record -- No unresolved FDA warnings, current certifications for your target markets, clean inspection history.
2. Technical capability -- Equipment that matches your product requirements, formulation development expertise if needed, analytical lab with the right instruments.
3. Capacity and flexibility -- Can they scale with you? What happens when your volume goes from 100,000 tablets to 1,000,000? Are you competing with larger customers for production slots?
4. Quality culture -- This is the intangible. You assess it during the audit. How do people behave? Is the QA head empowered? Do operators understand why they follow the procedures, or do they just follow them?
5. Communication and responsiveness -- How quickly did they respond to your initial inquiry? How organized was the quote? Did they ask good questions about your product, or just send a price? The quality of the pre-contract engagement predicts the quality of the ongoing relationship.
6. Price -- Yes, it matters. But it should be the last factor, not the first. The cheapest manufacturer is the most expensive one if your batch fails.

Getting Started

India's contract manufacturing market is enormous, diverse, and -- if you choose well -- an outstanding value proposition for pharmaceutical brands worldwide. The difficulty is not finding a manufacturer. It is finding the right one.

Define your requirements clearly. Understand the licensing model you need. Audit before you commit. Get the quality agreement right. Verify regulatory history. And do not chase the cheapest price.

If you are ready to start your search, browse our directory of verified Indian pharmaceutical manufacturers filtered by dosage form, certification, capacity, and location. You can also request quotes from multiple manufacturers simultaneously and compare them side by side. We have done the preliminary verification so you can focus on the evaluation that matters -- your own due diligence.