India Finalizes Rules for Compounding of Offences under the Drugs and Cosmetics Act

On July 10, 2024, India launched a 45-day public consultation on the draft Drugs and Cosmetics (Compounding of Offences) Rules. After reviewing public feedback, the Ministry of Health and Family Welfare officially released the finalized Drugs and Cosmetics (Compounding of Offences) Rules, 2025 on April 24, 2025. The rules came into effect upon publication in the Official Gazette on April 26, 2025.

Aligned with the Jan Vishwas (Amendment of Provisions) Act, 2023, which replaces imprisonment with monetary penalties for certain offenses under the Drugs and Cosmetics Act, 1940, the new compounding rules introduce a formal mechanism for compounding offenses—allowing companies and individuals to settle eligible violations by paying fines instead of facing prosecution.

Under this framework, applicants may request compounding—either before or after the initiation of prosecution—by submitting an application to the designated authority appointed by the central or state government. The compounding authority will review the application, consult relevant licensing authorities, and determine whether to grant immunity from prosecution upon payment of the prescribed fine or reject the request.

If immunity is granted, the compounded amount must be paid within 30 days. Immunity may be withdrawn if the applicant fails to make timely payment or is found to have concealed material facts or provided false evidence. In such cases, regular legal proceedings will resume.