Production Linked Incentive (PLI) scheme for the Pharmaceutical Sector

The PLI Scheme for Pharmaceuticals is based on the strategy of “Atmanirbhar Bharat- Strategies for enhancing India’s manufacturing capabilities and enhancing exports in ten sectors”, which had been approved by the Union Cabinet on 24.02.2021.  The Operational Guidelines for the scheme inviting applications from the pharmaceutical industry were issued on 01.06.2021 by the Department of Pharmaceuticals after intensive consultation with industry and related departments   and NITI Aayog.

The objective of the scheme is to enhance India’s manufacturing capabilities by increasing investment and production in the sector and contributing to product diversification to high value goods in the pharmaceutical sector. One of the further objectives of the scheme is to create global champions out of India who have the potential to grow in size and scale using cutting edge technology and thereby penetrate the global value chains.

The scheme will provide financial incentives on the incremental sales (over Base Year) of pharmaceutical goods and in-vitro diagnostic medical devices to selected applicants based on pre-defined selection criteria. The incentives will be paid for a maximum period of 6 years for each participant depending upon the threshold investments and sales criteria to be achieved by the applicant. The total quantum of the incentive for the scheme is Rs 15,000 crore. SIDBI is the Project Management Agency for the Scheme.

The applications were invited in three different categories of applicants to ensure fair competition and broad coverage amongst the industry players. The categories were based on the size of the applicant as determined by the global manufacturing revenues from pharmaceutical manufacturing. The scheme has received a very good response from the industry and a total of 278 applications were received by the closing date of 31.08.2021 against which a maximum of 55 applicants were to be selected.

The scheme covers three different product categories for which applicants have applied under the scheme. These products are expected to give an impetus to innovation, R&D and widening of product profile of India Pharmaceutical industry.

• Category 1: Biopharmaceuticals; Complex generic drugs; Patented drugs or drugs nearing patent expiry; Cell based or gene therapy drugs; Orphan drugs; Special empty capsules like HPMC, Pullulan, enteric etc.; Complex excipients; Phyto-pharmaceuticals.
• Category 2: Active Pharmaceutical Ingredients / Key Starting materials / Drug Intermediates (except the Active Pharmaceutical Ingredients / Key Starting materials / Drug Intermediates covered under the earlier PLI scheme for APIs/KSMs and DIs being implemented by the Department)
• Category 3 (Drugs not covered under Category 1 and Category 2): Repurposed drugs; Auto immune drugs, anti-cancer drugs, anti-diabetic drugs, anti-infective drugs, cardiovascular drugs, psychotropic drugs and anti-retroviral drugs; In vitro diagnostic devices; Other drugs not manufactured in India.

The appraisal of the applications has been carried out on the basis of the ranking methodology laid down in the operational guidelines of the Scheme. The selection of applicants in each of the three categories has been approved by the Hon’ble Minister for Chemicals and Fertilizers. The list of the 55 selected applicants is listed below. The Group A consists of 11 selected applicants, Group-B consists of 9 selected applicants and Group-C consists of 35 selected applicants of which there are 20 MSMEs.

A Technical Committee comprising of experts is assisting the Department with respect to the technical aspects of the scheme. SIDBI has put in place a digital mechanism for business processes being followed under the scheme. A robust monitoring framework will also be put in place to track the progress of the scheme.

With this announcement a major thrust in investment is expected by the pharmaceutical industry which is ultimately aimed at meeting the objectives of the scheme. The detailed scheme guidelines are available on the website of the Department at https://pharmaceuticals.gov.in/schemes. The portal of SIDBI containing finer details of the scheme can be accessed at https://pli-pharma.udyamimitra.in/

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