Trade License in India: Procedure, Benefits, Types & Cost Explained

In this article, we have discussed about how to get a trade license in India. read the complete article to know more about the procedure, benefits, cost and more.

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Trade License in India

Are you thinking about starting a new company and wondering what paperwork you’ll need? One of these important papers is the Trade License, which is required to start a company or trade within a specified municipal jurisdiction. A trade license is a formal legal document that offers authority to someone who wants to start a company. It enables them to carry out a specialized trade or commercial activity inside a defined location or territory. This license assures that the trade or company follows all necessary State Municipal Corporation safety requirements, protecting inhabitants from possible health concerns. This essay will thoroughly examine all aspects of the Trade License.

What is a Trade License in India?

The registration of a trade license is a formal procedure that involves the granting of a legal certificate by an approved state government institution, generally a local municipality. Individuals or groups may get a Trade License to begin commercial activities in a certain region. The licensed business must follow the regulatory authority’s laws and regulations.

An internet trading license is important for reasons other than legal permission. It demonstrates the company’s commitment to ethical behaviour by protecting the safety of inhabitants in the specified area. An application must be filed to the authorized commissioner at least 30 days before activities begin to begin the procedure. During this time, the applicant or business entity must provide the necessary papers.

Significance of Indian Trade License

The principal function of a trade license is to supervise and regulate commercial activities within a specified jurisdiction. This essential license guarantees that businesses comply with a multitude of local government regulations. These include regulations about health and the environment, zoning restrictions, and building codes. Furthermore, it is a requirement of the trade license that companies meet their financial commitments through the remittance of specified taxes and fees.

Eligibility Criteria for Acquiring Trade License in India

  • Applicants are strictly over the age of 18, As per legal requirements; juveniles are not eligible.
  • Legal status is required of the business requesting the license.
  • Applicants are required to possess a spotless record devoid of any prior criminal convictions.

Procedure to Obtain Trade License in India

  • Registration: To establish an account, verify your information, which must include your name, email address, and mobile number. You will be assigned a unique user ID and password by the system.
  • Formalize the Application: Utilize your username and password to gain entry to the application form. Provide the requested information in its entirety.
  • Collect Mandatory Documents: Assemble all mandatory documents in the specified format and verify their accurate signature by the appropriate authorities.
  • Transfer Documents: Online-upload each of the produced documents. Officials of Urban Local Bodies will conduct a verification evaluation of the application form and supporting documents.
  • Be assigned a distinct application number.: Successful verification will result in the generation and provision of a distinct application number.
  • Remittance of Fees: Make payment by navigating to the ‘Make Payment’ section. There may be a variety of payment methods accessible for your convenience.
  • Provision of a License Number: Upon satisfactory completion of all required documentation and online procedures, you will be officially issued your trade license number.

Various types of Trade Licenses in India

  • Industrial License: This classification encompasses a variety of manufacturing establishments, such as tiny, medium, and large-scale factories.
  • Shop Licenses: This category includes trade licenses for establishments engaged in potentially dangerous or objectionable activities. This encompasses various commercial activities such as burning wood sales, candle and pyrotechnics manufacturing, and the operation of laundromats (dhobi) and barbershops.
  • License for Food Establishments: This category of license applies to culinary industry enterprises. It consists of hotels, restaurants, food booths, canteens, and establishments that offer baked goods, livestock, and vegetables.

Cost of Trade License in India

The registration fees for trade licenses differ among states because they are administered by municipal governments. Determining these fees is subject to state-specific laws and regulations. Trade licensing fees are computed annually in certain jurisdictions. On the contrary, fees in certain states are calculated as a proportion of the annual revenue of the enterprise. It is critical to have a thorough understanding of the fee structure that is valid in your state to complete the trade license registration process in a compliant manner.

Benefits of Indian Trade License

  • Employee Safety: By guaranteeing that firms follow labour standards, trade licenses serve to avoid the exploitation of people working on the premises.
  • Company Development: Obtaining a trade license promotes company development by demonstrating credibility and reliability with consumers and partners.
  • Fire Safety: Trade licenses limit the danger of fire-related incidents inside company premises by enforcing appropriate safety measures.
  • Fair Trade Practices: Businesses are required to implement fair trade practices to protect the well-being and interests of all stakeholders.
  • Consumer Protection: Trade licenses protect customers from participating in illegal trade operations, therefore improving the company’s image and goodwill over time.

Documents needed to get a Trade License in India

  • Aadhaar card
  • ID proof of the applicant
  • Address proof of the business
  • PAN of all legal Entities
  • MOA, AOA and Incorporation Certificate of a company
  • No-Objection Certificate

Processing time of Trade License in India

After paying the costs, a trade license will be obtained in urban areas within 7-15 days. After payment of costs, it may take up to 30 days to receive the trade license in rural and small communities.


A trade license is required for all trading and manufacturing firms. A trade license is required for all small, medium, and big manufacturing industries/factories, shops, food companies, health care shops, hazardous enterprises, marriage halls, retail stores, and so on.

A trade license may be acquired from the municipality in where the business is situated. It is available online at the State Municipal Corporation website or in person at the Municipal Corporation office.

Yes. When your firm is governed by the State Municipal Corporation Act of the state in which it is situated, you must apply for a trade license.

A trade license may be obtained by the proprietor of a business, a corporation, or an LLP. 

The trade license is only good for a year.