Medical devices industry seeks clarity on PLI scheme

The PLI scheme is designed to attract investors in select 4 high technology target segments of medical devices where import dependence is very high.

Bp Apparatus, Medical Devices
Picture: Pixabay

The medical devices industry has sought clarity on the Central government’s claim that medical device sector has been adequately covered under the existing production linked incentive (PLI) scheme unlike pharmaceutical sector for which the Union Cabinet has recently approved new PLI scheme worth Rs. 15,000 crore to boost domestic manufacturing.

The Department of Pharmaceuticals (DoP) notified the PLI scheme for the medical device sector through a gazette notification dated July 21, 2020. Total financial outlay for the PLI scheme is Rs. 3,420 crore. The scheme is expected to see investment worth Rs. 5,400 crore, as per government estimates.

Medical device manufacturers had recently urged DoP to consider reducing the threshold investment limit in the range of Rs. 75 to Rs. 90 crore from Rs. 180 crore for domestic manufacturers in the production linked incentive (PLI) scheme for promoting domestic manufacturing of medical devices.

This, according to the Association of Indian Medical Device Industry (AiMeD), will also widen the scope of eligibility to cover C-19 utility medical devices.

The Government of India through its flagship “Make in India” initiative envisages to meet the rising demand of essential healthcare equipment for the country pushing the Indian medical devices sector to become self-reliant especially for essential 39 C-19 medical devices.

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Besides this Government had earlier also announced, medical device park scheme, which has an outlay of Rs. 400 crore for 4 medical device parks. This will offer world class testing facilities, lower cost of production and single window for regulatory approvals. It is expected to attract an investment of Rs. 40,000 crore in this sector.

Medical devices covered under the PLI scheme target segments include cancer care or radiotherapy medical devices, radiology and imaging medical devices, nuclear imaging devices, anaesthetics and cardio-respiratory medical devices including catheters of cardio respiratory category and renal care medical devices. Besides this, target segments also cover all implants including implantable electronic devices like cochlear implants and pacemakers.

The PLI scheme is designed to attract investors in select 4 high technology target segments of medical devices where import dependence is very high.

PLI scheme stipulates that the medical device company should be registered in India. There should be minimum Rs. 180 crore investment by one unit. Minimum net worth of the company should be Rs. 18 crore (30% of threshold investment of first year).

Applicants can apply multiple products within one target segment. Application window is 120 days and approval thereafter within 60 days. Applications can be made through the online portal of the Project Management Agency (PMA) and the maximum number of applicants to be selected is 28.

Under the PLI scheme, financial incentives shall be given to selected companies based on threshold investment and incremental sales (over Base Year) of medical devices covered under target segments. Under the Scheme, financial incentive shall be given to selected companies at the rate of 5% of incremental sales (over Base Year) of goods manufactured in India and covered under Target segments, for a period of five years i.e. from FY 2021-22 to FY 2025-26.

The scheme is applicable only for greenfield projects. Financial incentive under the scheme shall be provided only to companies engaged in manufacturing of goods covered under target segments in India. Eligibility shall be subject to thresholds of investment and incremental sales of manufactured goods (covered under Target Segments) over Base Year.

An applicant must meet all the threshold conditions to be eligible for disbursement of incentive. Eligibility under production linked incentive scheme shall not affect eligibility under any other Scheme and vice-versa. The tenure of the scheme is from FY 2020-21 to FY 2026-27.

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