Last Updated on June 20, 2021 by The Health Master
The Department of Pharmaceuticals (DoP) has invited applications from eligible applicants to manufacture chemical synthesis based KSMs / drug intermediates (DIs) like cyclohexane diacetic acid (CDA) and other chemical synthesis based KSMs / drug Intermediates / APIs like artesunate under the production linked incentive (PLI) scheme to boost domestic manufacturing.
As per a DoP notice, attention is invited to this Department’s Notice of even number dated April 30, 2021 on the subject cited above and to say that in addition to the list of eligible products for which applications have been re-invited, the Department invites applications from eligible applicants under the Scheme for the left over slots / quantity for the following eligible products.
As per the guidelines of PLI scheme for boosting indigenous production of 41 products which cover all the identified 53 APIs for which India is critically dependent on China, the criteria of ‘minimum threshold’ investment have now been replaced by ‘committed investment’ by the selected applicant.
The change has been made to encourage efficient use of productive capital as the amount of investment required to achieve a particular level of production depends upon choice of technology and it also varies from product to product. The provision for verification of the actual investment made by the selected applicant for the purpose of giving incentives under the scheme continues.
The provision which restricts the sales of eligible products to domestic sales only for the purpose of eligibility of receiving incentives has been deleted, bringing the scheme in line with other PLI schemes and encouraging market diversification.
A change has been made in the minimum annual production capacity for 10 products viz tetracycline, neomycin, para amino phenol (PAP), meropenem, artesunate, losartan, telmisartan, acyclovir, ciprofloxacin and aspirin. Minimum annual production capacity is a part of eligibility criteria under the scheme.
The guidelines of the scheme were originally issued on July 27, 2020 which was later on superseded by revised guidelines issued by the department on October 29, 2020.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.
DoP on July 21, 2020 notified 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.
In total, 215 applications were received until February 2021 under the PLI scheme for the 36 products spread across the 4 target segments.
The Union cabinet recently cleared the 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.
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