- AI CFO
Production Linked Incentive (PLI) Scheme for KSMs, DIs and APIs
Updated: Jan 13, 2022
Production Linked Incentive (PLI) Scheme for Promotion of Domestic Manufacturing of critical Key Starting Materials (KSMs)/ Drug Intermediates and Active Pharmaceutical Ingredients (APIs) in the Country.
Major achievements in PLI being implemented:
With an objective to attain self-reliance and reduce import dependence in these critical Bulk Drugs - Key Starting Materials/ Drug Intermediates and Active Pharmaceutical Ingredients 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% ) totaling 41 products with a total outlay of Rs. 6,940 cr. for the period 2020-21 to 2029-30.
Response of Industry Leaders:
In the PLI Scheme for Bulk Drugs, the major successful players/ participants include M/s. Aurbindo Pharma Group, M/s. Hetero Group, M/s. Karnataka Antibiotics and Pharmaceuticals Limited, M/s. KinvanPvt. Ltd, M/s. Natural Biogenex Private Limited, etc.
These include global players with strong presence in advanced markets.
Expected outcomes in terms of increase in investment, production, exports and employment:
In total 215 applications have been received for the 36 products spread across the 4 Target Segments for the PLI schemes for Bulk Drugs from all over the country.Out of these, 47 applications have been approved by the Government, with a total Committed Investment of Rs. 5,366.35; Maximum Incentive proposed for disbursement: Rs. 6,000 crore and Expected Employment Generation of about 12140.
The scheme will be part of the umbrella scheme for the Development of Pharmaceutical Industry. The objective of the scheme is to enhance India's manufacturing capabilities by increasing investment and production in the sector and contributing to product diversification to high value goods in the pharmaceutical sector. One of the further objectives of the scheme is to create global champions out of India who have the potential to grow in size and scale using cutting edge technology and thereby penetrate the global value chains.
Implementing Ministry/Department: Department of Pharmaceuticals
Approved financial outlay over a five year period Rs. 15000 crores
ii. Complex generic drugs
iii. Patented drugs or drugs nearing patent expiry
iv. Cell based or gene therapy products
v. Orphan drugs
vi. Special empty capsules
vii. Complex excipients
Active Pharma Ingredients (APIs) /Key Starting Materials (KSMs) and /Drug Intermediaries (Dls)
i. Repurposed Drugs
ii. Auto-immune drugs, Anti-cancer drugs, Anti diabetic drugs, Anti Infective drugs, Cardiovascular drugs, Psychotropic drugs and Anti-Retroviral drugs
iii. In-vitro Diagnostic Devices (IVDs)
v. Other drugs not manufactured in India
vi. Other drugs as approved
The manufacturers of pharmaceutical goods registered in India will be grouped based on their Global Manufacturing Revenue (GMR) to ensure wider applicability of the scheme across the pharmaceutical industry and at the same time meet the objectives of the scheme. The qualifying criteria for the three groups of applicants will be as follows-
(a) Group A: Applicants having Global Manufacturing Revenue (FY 2019-20) of pharmaceutical goods more than or equal to Rs 5,000 crore.
(b) Group B: Applicants having Global Manufacturing Revenue (FY 2019-20) of pharmaceutical goods between Rs 500 (inclusive) crore and Rs 5,000 crore.
(c) Group C: Applicants having Global Manufacturing Revenue (FY 2019-20) of pharmaceutical goods less than Rs 500 crore. A sub-group for MSME industry will be made within this group, given their specific challenges and circumstances.
Quantum of Incentive:
The total quantum of incentive (inclusive of administrative expenditure) under the scheme is about Rs 15,000 crore. The incentive allocation among the Target Groups is as follows:
(a) Group A: Rs 11,000 crore.
(b) Group B: Rs 2,250 crore.
(c) Group C: Rs 1,750 crore.
The incentive allocation for Group A and Group C applicants shall not be moved to any-other category. However, incentive allocated to Group B applicants, if left underutilized can be moved to Group A applicants. Financial Year 2019-20 shall be treated as the base year for computation of incremental sales of manufactured goods.