Government Approves PLI Scheme to Promote Domestic API Production.

Summary :

The total outlay of the scheme as decided by the government is Rs.6,940 crore. The scheme will provide financial incentives for selected participants on incremental sales of 41 identified products in four different target segments for a period of six years.

In an effort to reduce the dependence on imports of active pharmaceutical ingredients (APIs), the Central Government has approved a Production Linked Incentive (PLI) scheme to promote domestic manufacturing of critical key starting materials (KSMs), drug intermediates (DIs) and APIs in India.

In a written reply, Health Minister Mansukh Mandaviya informed Rajya Sabha that the total outlay of the scheme as decided by the government is Rs. 6,940 crore.

The scheme will provide financial incentives for selected participants on incremental sales of 41 identified products in four different target segments for a period of six years.

Government had also approved the PLI scheme for pharmaceuticals earlier in March to enhance India’s manufacturing capabilities by increasing investment and production in the sector.

The scheme also aims to contribute to product diversification and manufacturing high value goods in the pharmaceutical sector.

The total outlay of the scheme is Rs. 15,000 crore with financial incentives for selected participants on incremental sales for a period of six years.

He further highlighted that 50 applicants have been approved under the PLI Scheme for Bulk Drugs while 55 applications have been approved for PLI Scheme for pharmaceuticals.

With an objective to attain self-reliance and reduce import dependence in these critical Bulk Drugs – Key Starting Materials (KSMs)/ Drug Intermediates and Active Pharmaceutical Ingredients (APIs) in the country, the Department of Pharmaceuticals had launched a Production Linked Incentive (PLI) Scheme for promotion of their domestic manufacturing by setting up greenfield plants with minimum domestic value addition in four different Target Segments (In Two Fermentation based – at least 90% and in the Two Chemical Synthesis based – at least 70% ) for 41 products with a total outlay of Rs. 6,940 cr. for the period 2020-21 to 2029-30.

In total, 215 applications were received for the 36 products spread across the 4 Target Segments. The applications under the target Segments I, II and III were considered and eligible applications approved in earlier meetings of the Empowered Committee. Out of total 174 applications received for 23 Eligible Products under Target Segment IV – Other Chemical Synthesis Based KSMs/ Drug Intermediates/APIs, 79 applications received for 11 eligible products were considered earlier and 14 applications approved in the sixth meeting of the Empowered Committee. In the 7^th Meeting of the Empowered Committee held on 19.03.2021 the remaining 95 applications under the Target Segment IV were considered.

With this, all the 215 applications received have been considered and a total of 47 applications (excluding 2 successful applications withdrawn subsequently) with committed investment of Rs.5366.35 crore have been approved by the Government under the PLI Scheme for Active Pharmaceutical Ingredients (APIs). Setting of these plants will make the country self-reliant to a large extent in respect of these Bulk drugs. The disbursal of production linked incentive by the Government over the six years period would be up to a maximum of about Rs.6,000 cr against the budgetary outlay of Rs 6940 crore.

Under the Production Linked Incentive (PLI) Scheme for Promoting Domestic Manufacturing of Medical Devices, after considering all 28 applications, 14 applications have been approved by the Government with a committed investment of Rs. 873.93 cr. which will lead to utilization of maximum incentive of about Rs1,694 cr. against total budget outlay of Rs. 3,420 cr. The Government has decided to re-invite applications for the uncovered/ under-covered products in the PLI Schemes for Bulk Drugs and Medical Devices for utilizing the approved outlay.

The Indian pharmaceutical industry is the 3^rd largest in the world by volume. It has high market presence in several advanced economies such as the US and EU. The industry is well known for its production of affordable medicines, particularly in the generics space. However, the country is significantly dependent on the import of basic raw materials, viz., Bulk Drugs that are used to produce medicines. In some specific bulk drugs, the import dependence is 80 to 100%.

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