Trade License for Business Operations in India: Online Application Process 2025

In India, businesses operating within municipal jurisdictions must obtain a trade license as required by state-level Municipal Corporation Acts. The process for applying, renewing, and downloading trade licenses has been moved online via urban local body (ULB) portals.

India Briefing explores the current online trade license system, different license types, who needs them, how to apply, and what businesses should keep in mind to stay compliant.

A trade license is a legal requirement for any individual or firm engaging in commercial activities within a municipality. It ensures that the business complies with local health, safety, and legal norms. The license also enables formal business operations, helps with access to credit, and protects against penalties.

Types of trade license in India

In India, trade licenses are issued based on the nature of the business. These categories are laid out in state-specific Municipal Corporation Acts and handled by individual ULBs. ULBs may revise these categories or fees based on local requirements and state guidelines.

READ ON: Shops and Establishment Acts in India: An Explainer

Eligibility and prerequisites

The firms are required to get trade licenses within 30 days of starting business operations. The following general conditions apply in most jurisdictions:

• The business premises must be located within municipal limits;
• The applicant must provide proof of ownership or a legal rental/lease agreement;
• There should be no pending municipal dues such as property tax or water bills; and
• The site must not be involved in any legal violations.

Some sector-specific prerequisites are namely:

• Food businesses require registration with the Food Safety and Standards Authority of India (FSSAI);
• Medical clinics must obtain approvals from state medical boards; and
• Hazardous businesses need environmental and fire safety clearances.

Step-by-step process to obtaining trade license online

Most ULBs now support full digital processing of trade license applications through their online platforms. The steps are generally uniform across portals such as Municipal Corporation of Delhi (MCD), Telangana e-Municipal, and West Bengal e-District:

Account creation

• Register or log in on the relevant municipal e-services portal
• Complete mobile one-time-password (OTP) or Aadhaar-based authentication.

Service selection

• Choose “New Trade License” under the available citizen services; and
• Select the required category and subcategory of trade.

Form filling

• Enter business and proprietor details such as name, address, and area of the shop; and
• Mention the previous license number if you are renewing the license.

Document upload

• ID proof (Aadhaar, Permanent Account Number/PAN);
• Address proof (rent deed, ownership documents); and
• Tax receipt, neighbor No Objection Certificate (NOC), if applicable, and approvals like FSSAI or fire NOC.

Fee payment

• Fees are calculated based on business type, risk level, and municipality classification; and
• Payment modes include UPI, debit/credit cards, and net banking.

Application tracking

• An Application Reference Number (ARN) is generated, and
• Status can be tracked via the portal or SMS alerts until final approval.

Certificate issuance

• Once approved, the trade license certificate can be downloaded instantly in PDF format.

Download and verification of certificate

To download or verify a license certificate, please:

• Go to the “Download Trade License” section on the ULB portal.
• Enter the ARN or registered mobile number;
• Authenticate using OTP; and
• Access the certificate for download or verification.

Validity and renewal process

Most trade licenses in India are issued with a validity of one year. And the renewals must be completed before expiry, usually between January 1 and March 31 each year. Several ULBs now send automatic renewal reminders via SMS or email to registered firms.

The renewal process is largely digitized across most states. Businesses can log into the relevant ULB or e-District portal, retrieve their license details using their Taxpayer Identification Number (TIN) or Application Reference Number (ARN), and proceed with online renewal. The system auto-generates the renewal fee based on the type of trade. Once the payment is completed, the renewed trade license certificate is issued instantly.

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In many jurisdictions, licenses can be renewed for a period of up to five years, depending on the options made available by the local authority. Some states, like West Bengal, have introduced circulars to support auto-renewal.

This digital shift is based on state-specific Municipal Corporation Acts. For example, the Municipal Corporation Act, 1888 of Mumbai prohibits beginning any trade or business within municipal limits without a valid trade license. In the state of West Bengal, the local urban development body allows real-time license renewal without physical visits.

Fees, renewals, and penalties

Trade license fees vary depending on the nature of the trade, the risk category, and the floor area of the business premises. Generally, the cost is between INR 500 (US$5.7) and INR 5,000 (US$57.5) per year, though larger commercial operations may attract higher charges.

For late renewal, one can attract daily fines, usually between INR 50 (US$0.57) and INR 500 (US$5.7), depending on the municipality. These fines may increase if the license remains expired for a long period.

Trade license updates across states in India

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In Delhi, the state government has proposed eliminating the distinction between health, general, and factory trade licenses in July 2025. They intend to unify approvals from various agencies, like the Goods and Services Tax (GST) network, Food Safety and Standards Authority of India (FSSAI), Employees’ State Insurance Corporation (ESIC), fire departments, and the Delhi Pollution Control Committee (DPCC), into a single-window platform managed by a municipal agency.

As per reports published on June 18, 2025, the state municipal corporation has made it compulsory to upload all supporting documents before a health trade license. The license, upon successful upload, can be instantly downloaded. Applications linked to noncompliant trades now face the risk of license revocation or penalties.

In Karnataka, ULBs are also joining the online bandwagon. Mangaluru City Corporation is moving to the state-level Vyapar portal. This could bring it in line with a uniform trade license issuance process across Karnataka’s ULBs.

Practical tips for businesses

To stay compliant and avoid unnecessary delays, businesses should:

• Apply early by submitting applications or renewals at least 30 days in advance;
• Maintain digital records of license certificates, receipts, and application forms for audits;
• Track regulatory changes by subscribing to ULB notifications for changes in license types or fee slabs; and
• Use professional help of trade license consultants if you are operating across multiple cities.

Summary

Getting trade licenses has become easier due to digitization, but this also invites greater scrutiny of documents and trade type. So, businesses should understand their trade classification and stay current with ULB circulars to avoid penalties. This can be eased with the aid of professionals and local officials who understand city-specific requirements.

Read more: Navigate India’s New CSR-1 Requirements: Essential Guide for Businesses

(US$1 = INR 87.72)

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