Indian ayurvedic drug market is estimated to be about Rs 8,000 crores comprising of products manufactured and marketed by thousands of small, medium scale units and a dozen large companies. With the demand for ayurveda and herbal products increasing steadily in the domestic and overseas markets, consumption of these products is expected to go up substantially in the coming years. Raw materials for the production of most of the products are procured primarily from the forests and other natural sources. With 15 agro-climatic zones, the country has about 18000 species of flowering plants and out of which 7000 are estimated to have medicinal usage in folk and documented systems of medicine, like Ayurveda, Siddha and Unani. About 960 species of medicinal plants are estimated to be in trade of which 178 species have annual consumption level in excess of 100 tones. Medicinal plants are not only a major resource base for the traditional medicine and herbal industry but also provide livelihood to a large segment of Indian population. With pressure on increasing production of ayurveda and herbal drugs, availability of good quality raw materials has become a big challenge to this sector. Although organised cultivation of medicinal plants was initiated  by the Central government with the establishment of National Medicinal Plants Board in 2000, there has been no notable increase in supplies of medicinal plants yet. The shortage of plant raw materials is, thus, adversely affecting not only the business of the small and medium scale units but also the quality of end products as these manufacturers are forced to buy substandard raw materials at high prices from unreliable sources.

Maintaining safety and efficacy of Ayush drugs has been, therefore, a matter of concern for the regulatory authorities for some time. A separate ministry at the Central government and exclusive departments for Ayush also have been set up in some states to bring in a regulatory structure for this sector as is the case with modern medicine. Currently any ayurveda manufacturer can launch a product throughout the country once a product license is obtained from any state. No pre clinical or clinical trials needs to be conducted for ensuring the safety and efficacy of the product. The key issue here is the absence of an appropriate system of granting marketing approval for the new ayurveda drug. The move by the Union ministry of Ayush to allow marketing of any new ayurveda drug only after successful completion of clinical trials for its safety and efficacy is thus a step in the right direction. Enforcement of such a rule can ensure controlling the entry of irrational and harmful combinations also into the market.