Govt issues revised guidelines for PLI scheme for API units

The Union cabinet cleared the new PLI scheme for the domestic pharmaceutical sector for financial years 2020-21 to 2028-29.

Govt of India

The Department of Pharmaceuticals (DoP) has issued revised Guidelines for the production linked incentive (PLI) scheme for promotion of domestic manufacturing of critical key starting materials (KSMs), drug intermediates (DIs) and active pharmaceutical ingredients (APIs) in India under the newly approved Rs. 15, 000 crore PLI scheme to boost existing brownfield API units in the country.

The Union cabinet cleared the new PLI scheme for the domestic pharmaceutical sector for financial years 2020-21 to 2028-29. About Rs. 15,000 crore worth of incentives is envisaged to be provided under the scheme, with total incremental sales worth Rs. 2.94 trillion and incremental exports of Rs. 1.96 trillion expected during the six years.

Industry experts have appreciated the second part of PLI scheme with the cabinet’s approval of Rs. 15,000 crore for incentivizing the pharma sector. In an earlier move, the government had approved Rs. 6,940 crore for 53 bulk drugs and Rs. 3,000 crore for the development of bulk drugs park towards making the industry self-reliant and discouraging sub-standard API imports.

The new PLI scheme is envisaged to boost existing brownfield API units in country and will bring first priority 20 molecules to be produced with scale thus beating Chinese imports.

Pharma Factory
Picture: Pixabay

The DoP had earlier also notified the Rs. 3,000 crore bulk drug parks’ promotion scheme and Rs. 6,940 crore PLI scheme for promotion of domestic manufacturing of critical KSMs/DIs and APIs in India. The gazette notification dated July 21, 2020 superseded the earlier notification of DoP issued on this subject on June 2, 2020.

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Talking about bulk drugs incentive scheme of the government, DV Sadananda Gowda, Union minister for chemicals and fertilizers had stated, “Bulk drugs scheme is to give recognition to Indian pharma industry as Atmanirbhar Bharat.

It is also a welcome development that medical devices industry which has 86 per cent dependence on imports clocked in Rs. 49,500 crore worth of imports in 2019-20.

According to an industry expert, “This is a welcome change as 35 to 40 per cent of existing brownfield API unit’s capacity need to be utilized. It has been learnt that around 20 molecules can be manufactured by synthetic chemistry within a period of two to three months.

This can be done considering the fact that the earlier PLI scheme of Rs. 6,940 crore announced in the month of July, 2020 will take minimum two years to fructify. Fermentation based units alone will take three to four years as setting up of greenfield units generally entail a time period of two years time.

The three categories which have been identified and included in the PLI scheme for pharma will boost biopharmaceuticals, complex generic drug, patented drugs or drugs nearing patent expiry, cell-based or gene therapy products, orphan drugs, special empty capsules, complex excipients, APIs/KSMs and Dls, repurposed drugs, auto-immune drugs, anti-cancer drugs, antidiabetic drugs, anti- infective drugs, cardiovascular drugs, psychotropic drugs, anti-retroviral drugs, in-vitro diagnostic devices (IVDs) and phytopharmaceuticals.

The guidelines of the scheme were originally issued on July 27, 2020 which was later on superseded by revised guidelines issued by the department on October 29, 2020.

As per PLI scheme guidelines dated July 27, 2020, threshold investment was Rs. 400 crore for four fermentation based products and Rs. 50 crore for ten fermentation based products. Similarly, threshold investment was Rs. 50 crore for four chemically synthesised products, and Rs. 20 crore for 23 chemically synthesised products.

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