Last Updated on August 12, 2021 by The Health Master
A Parliamentary Panel on Commerce has recommended to the Central government to formulate a production linked incentive (PLI) scheme and announce it at the earliest for 100 chemicals and intermediates which are essential for the production of bulk drugs in the country.
The Department related Parliamentary Standing Committee on Commerce was reacting to the Department for Promotion of Industry and Internal Trade’s (DPIIT) response on the action taken by the government on the recommendations and observations of the committee in its earlier report on ‘Attracting investment in post-Covid Economy: Challenges and Opportunities for India’, which was laid on the table of Rajya Sabha and Lok Sabha on February 10, 2021.
The Committee chaired by Member of Parliament V Vijayasai Reddy, in the report in February observed that the Indian pharmaceutical industry has been sourcing its requirements of chemical intermediates of bulk drugs in large quantities from China. The Committee opined that there is an urgent need to support the chemical intermediate manufacturers in order to promote the manufacturing of APIs from domestically produced intermediates and recommended that the incentives on the line of the PLI schemes may be extended to domestic chemical intermediate manufacturers.
In response, the Department of Chemicals and Petrochemicals (DCPC) has informed that as per the directions of Empowered Group of Secretaries (EGOS) meeting held on July 31, 2020 to work out the details of the individual PLI schemes for chemical sector, the Department constituted a technical committee on August 17, 2020 to prepare the draft guidelines for the scheme for promotion of domestic manufacturing of intermediates, bulk chemicals and raw materials for Agrochemicals, Dyes stuff, Pharmaceuticals etc.
The technical committee submitted its report on November 2, 2020. The DCPC has identified around 100 chemicals/intermediates which are imported in large value and these chemicals are used in manufacturing the products having substantial export potential. The department informed that these 100 chemicals are proposed to be supported under the PLI scheme for the chemical sector.
The proposed PLI scheme aims at incentivising domestic production of intermediates and raw materials for agrochemicals, dyes stuff, pharmaceuticals etc. with emphasis on domestic value addition. However, the PLI scheme for chemicals has not been considered yet.
The Committee, considering the action taken report from the department further recommended, “In view of the heavy dependence on import for meeting the required chemicals/intermediates for bulk drugs and taking into account the fact that it has a substantial export potential, the Committee opines that the domestic manufacturing of these chemicals/ intermediates should be promoted.”
“Further, the success of the PLI schemes on active pharmaceutical ingredients / bulk drugs depends on the promotion of domestic manufacture of these chemicals/intermediates. The Committee, therefore, recommends that the PLI scheme for the 100 chemicals/intermediates identified by the Department of Chemicals and Petrochemicals should be formulated and announced at the earliest,” it added.
It may be noted that the Government of India has approved the PLI scheme for pharmaceuticals on February 24, 2021, estimating an export generation potential of Rs. 1,96,000 crore over a period of six years. It is estimated with an investment potential of around Rs. 15,000 crore and the generation of employment potential of 20,000 direct and 80,000 indirect jobs.
It has also notified a PLI scheme for promotion of domestic manufacturing of critical key starting materials (KSMs)/drug intermediates and APIs in the country on July 21, 2020, and a PLI scheme for promoting domestic manufacturing of medical devices. It has also announced schemes for promotion of bulk drug parks and medical devices parks, among others to promote the industry in the country to decrease its imports and grow exports.