In July 2026, a joint inspection team from the Central Drugs Standard Control Organisation (CDSCO) and the Uttarakhand State Licensing Authority walked into a pharmaceutical plant in Dehradun’s Selaqui industrial area and recommended that all manufacturing stop immediately. Four months later, the plant is still operating, and there is no public record that anyone acted on the recommendation.
The case is worth understanding for anyone who buys Indian generic medicines, because it exposes something more consequential than a single non-compliant factory: a gap between what central inspectors conclude and what state regulators actually enforce.
What the Inspection Found
The facility is Daffohils Laboratories Private Limited, which manufactures tablets, capsules, syrups, dry syrups, ointments, creams and dusting powders. The inspection took place between 8 and 10 July 2026, according to a Centralised Public Grievance Redress and Monitoring System (CPGRAMS) order dated 19 August 2026.
It was triggered by a confidential complaint filed in March 2026 with the office of Drugs Controller General of India Rajeev Singh Raghuvanshi. The complaint listed 12 broad categories of alleged violations, reported by The Hindu BusinessLine and Medical Dialogues:
- Absence of environmental monitoring at the site
- Inadequate monitoring of pharmaceutical water systems
- Incomplete testing of raw materials and finished products
- Release of finished products without appropriate microbiological testing
- No operational microbiology laboratory for a period, without regular outsourcing of the required tests
- Microbiological results appearing in Certificates of Analysis (COAs) without supporting laboratory data
- Products dispatched before required testing was complete, with COAs prepared afterwards when customers requested them
- Testing records for roughly 12 products allegedly prepared retrospectively for a regulatory inspection, with some data apparently backdated
- Deficiencies in equipment qualification, process validation and calibration
These remain allegations. No regulator has published a findings document confirming them. That is itself part of the problem.
The Recommendation Nobody Published
The details surfaced only through Right to Information requests and grievance appeals, not through proactive disclosure.
In an order dated 17 August 2026 on an RTI first appeal, CDSCO’s First Appellate Authority confirmed that a joint risk-based inspection had been conducted and that the inspection team had recommended an immediate halt to all manufacturing. Quoted in the RTI response, the team said:
“All manufacturing activities undertaken by the firm at subject facility may be stopped immediately.”
The team went further. It recommended that the Uttarakhand State Licensing Authority issue a show-cause notice under Rule 85 of Drugs Rules, 1945, followed by suspension or cancellation of the manufacturing licence and related product permissions.
Rule 85 is the provision that lets a licensing authority cancel or suspend a manufacturing licence for repeated or serious breaches of licence conditions. Invoking it is not a routine inspection note — it is the formal start of licence removal.
Why the Plant Kept Running
The answer lies in a jurisdictional split that is widely misunderstood outside the sector.
CDSCO can inspect. But under the Drugs and Cosmetics Act, 1940, the power to grant manufacturing licences and to act against violations rests with state authorities. CDSCO stated this explicitly in its responses, saying that State Licensing Authorities are empowered to act on licence-condition violations, including initiating prosecution in an appropriate court. It advised the complainant to approach the state authority instead.
That produces an awkward outcome here: the state authority’s own officials were part of the team that recommended the halt. Australian-style “cooperative federalism” this is not — the recommendation came from a joint team, yet the follow-through was left to one half of that team, and nothing visible happened.
In a further response dated 14 October 2026, CDSCO again directed the applicant to the state regulator. It did not provide the inspection report, the specific deficiencies identified, or an Action Taken Report (ATR) explaining what followed the recommendation to stop manufacturing.
Drugs Controller General of India Rajeev Raghuvanshi and Uttarakhand State Drugs Controller Tajbar Singh Jaggi were reported as unavailable for comment.
The Company’s Position
Daffohils Laboratories Managing Director IPS Chawla said the joint inspection was part of the established regulatory process. He stated that all relevant facts, explanations and clarifications concerning the inspection observations had been submitted to the competent authorities, and that the matter had been dealt with under applicable statutory provisions and regulatory procedures.
On the specific allegations around microbiological testing, COAs, data integrity and quality-control documentation, Chawla said these were technical and internal company records that needed to be examined in their entirety and within the appropriate regulatory context, and that it would not be appropriate to provide selective interpretations or independent comment.
That is a legitimate position for a company facing unresolved allegations. It does not resolve the public-interest question of whether a plant flagged for an immediate halt is currently making products that enter the supply chain.
Why This Matters for Medicine Buyers
Three practical implications follow from this case.
- An inspection report is not an enforcement action. A “recommended halt” is a finding, not an order. Until a licence is suspended or cancelled by the licensing authority, the plant’s product permissions remain legally valid. Buyers should not read news of a GMP inspection as evidence that supply has stopped.
- State, not centre, is the enforcement lever. For any CDSCO-flagged facility, the meaningful question is what the relevant State Licensing Authority has done under Rule 85 — show-cause notice, suspension, cancellation, prosecution — not what CDSCO recommended.
- Absence of an ATR is a red flag, not proof. No published Action Taken Report means the public cannot distinguish “action pending” from “action dropped.” Treat it as unknown, not as clearance.
For buyers sourcing from Indian manufacturers, the defensible approach is to verify the licence status of the specific facility and product permission directly with the state licensing authority, rather than relying on inspection headlines in either direction. A facility with a clean-looking status page but an unresolved CDSCO recommendation is a facility to ask questions about.
For a list of verified and reliable pharmaceutical distributors, refer to the IMSDA’s verified member directory.
The Bigger Pattern: Inspections Without Follow-Through
This is not an isolated story so much as a structural one. India’s drug regulator has expanded risk-based inspections substantially, and the enforcement machinery has not scaled with it. Two recent data points sit alongside this case:
- A 2026 white paper on manufacturing compliance found that 80% of surveyed mid and large USFDA-approved Indian formulation plants report open investigations that delay batch release. That survey sample size has not been disclosed. [CITATION NEEDED]
- The government has drafted rules (G.S.R. 956(E)) allowing immediate suspension of manufacturing licences when a drug fails specified quality tests, on a CAPA-based pathway. Those rules are still at draft stage.
Both point the same direction: the detection layer is getting stronger, while the closure layer — the part that converts a finding into a licence decision — remains slow, opaque and split across jurisdictions. The Daffohils case is the clearest illustration yet of what that gap looks like in practice: a July finding, an August confirmation that a halt was recommended, an October referral to the state, and a November plant still running.
What to Watch Next
- Whether the Uttarakhand State Licensing Authority issues a Rule 85 show-cause notice, and whether it becomes public
- Whether CDSCO publishes the July inspection report or an Action Taken Report
- Whether the pending G.S.R. 956(E) draft rules, once finalised, shorten the interval between finding and enforcement action
- Whether other RTI-driven cases reveal a similar pattern of unreleased inspection findings
For more information, contact IMSDA at contact@indiamedicine.org.
Sources
The Hindu BusinessLine, “Uttarakhand drug plant continues functioning despite CDSCO recommended shutdown,” Ankita Upadhyay, updated 5 November 2026. Medical Dialogues, “CDSCO Flags GMP Concerns at Uttarakhand Pharma Unit, Recommends Immediate Halt to Production,” 7 November 2026. DrugsControl Media Services, “Dehradun Drug Plant Continues Operations despite CDSCO-Recommended Shutdown amid Quality Concerns,” 6 November 2026. Primary references cited within these reports: CDSCO First Appellate Authority order dated 17 August 2026 (RTI first appeal); CPGRAMS order dated 19 August 2026; CDSCO response dated 14 October 2026.