India’s cosmetics sector is set to generate USD 20 billion by 2025, growing at 8-9% annually. It is a significant contributor to the economy, driven by evolving consumer preferences, global beauty trends, and increasing digital adoption. However, the sector is governed by pre-independence legislation, including the Drugs and Cosmetics Act, 1940, and the Cosmetic Rules, 2020, supplemented by BIS labelling standards. While these regulations ensure product safety and quality, they also present compliance challenges that can hinder innovation and market adaptability.
A key regulatory development is the Draft Drugs, Medical Devices, and Cosmetics Bill, 2022, which aims to modernise oversight, establish uniform quality standards, and streamline approval processes. However, concerns persist regarding centralised control and its implications for state-level regulatory autonomy, potentially affecting ease of doing business and sectoral growth.
This discussion paper critically examines the existing regulatory landscape and its impact on the cosmetics industry. It delves into the complexities of compliance, market entry barriers, and the influence of international regulatory standards. It further explores the balance between consumer safety and the industry’s ability to innovate, addressing both the potential benefits and concerns of proposed reforms.
With India’s cosmetics market at a pivotal stage of transformation, regulatory clarity will be key to ensuring sustainable growth and fostering a globally competitive industry.
Want to understand how these policies will shape the future of India’s cosmetics industry? Download the full report for key insights.
