Import listing to help home cosmetics sector

A proposal from the Ministry of Health and Family Welfare to mandate the registration of imported cosmetics may prove to be a boon for domestic manufacturers, affected by the dumping of beauty and personal care products worth over Rs 600 crore annually from countries like China and Indonesia.

A draft notification to amend Rule 129 of the Drugs and Cosmetics Act, 1945, proposes compulsory registration of all cosmetics imported into the country with the license authority, appointed by the central government under Rule 21 of the Act.

Each product will attract a registration fee of $250 and inspection fee of $5,000. The registration will be valid for a three-year period with renewals possible.

Industry sources said the 2000-odd small- and medium-scale domestic manufacturers, who annually produce Rs 8,000-10,000 crore worth of cosmetics like shampoos, hair dyes, colour cosmetics and eyeliners, are facing severe competition from Chinese and Indonesian manufacturers.

While it is mandatory for domestic manufacturers to obtain a licence from the state-level food and drugs administration to manufacture and sell cosmetics, overseas manufacturers are allowed to sell their products freely in the Indian market.

"Lack of regulations contributed to the proliferation of sub-standard and spurious cosmetics in the Indian market. Multinational players operating in the country were also benefited since they could import products at cheaper rates from various overseas manufacturing locations," industry sources said.

"Indian manufacturers have to pay a registration fee of $250 on each of the product strengths in our export market, incurring huge expenses. Our demand is to enforce $500 as registration charge for not only one product, but on various strengths of all imported cosmetics," said Kajal Anand, president of the All India Small Scale Cosmetics Manufacturers' Association.

The Indian market for cosmetics is valued at around Rs 26,000 crore. Of this, about 58 per cent of the sales are in the hair and skin care segment, which is growing at the rate of 10-20 per cent a year.

"Out of the 2,000-odd units operating in the country, more than 60 per cent have a turnover of less than Rs 50 lakh per year, while the rest 35 per cent manufacturers have a turnover of close to Rs 100 lakh," the sources said.