India offers $2.06 billion sops; to pick 55 applicants for new pharma PLI scheme

The Indian government has offered 55 drugmakers $2.06 billion in production-linked incentives (PLI) for six years through fiscal year 2029 to boost manufacturing of medicines, in-vitro diagnostics and their raw materials. The incentives, similar to cashbacks, would be given to the drugmakers as a proportion of incremental sales, over and above the revenue generated in the financial year 2019-20.

The Department of Pharmaceuticals (DoP), which has formulated the scheme, has divided the products - which consist of formulations, biopharmaceuticals, bulk drugs and in-vitro diagnostic medical devices, among others - into three categories. The first and second categories would attract a 10% incentive on incremental sales, and the third category would attract a 5% incentive.

Based on a series of consultations with pharma industry and stakeholders in the government, the operational guidelines for the scheme were prepared. The scheme envisages to create global champions out of India and has the potential to grow in size and scale using cutting edge technology which will help penetrate global value chains.

Scheme can also boost R&D

Additional Secretary, Department for Promotion of Industry and Internal Trade, Sumita Dawra, said the PLI scheme can boost R&D, economies of scale, can encourage meeting quality standards and therefore, has the potential to create global champions.

The application window is for 60 days starting June 2, 2021, to July 31, 2021. The products covered under the scheme are formulations, biopharmaceuticals, active pharmaceutical ingredients, key starting material, drug intermediates, in-vitro diagnostic medical devices, etc.

Ms Dawra said in the pharma sector, bulk drugs have received $741 million, medical devices $119 million and 3rd PLI for Pharma has received $2.06 billion in investments, adding that  the PLI scheme is already generating transformation and is expected to generate further benefits over the next five years.

Former Commerce Secretary Ajay Dua said eligible beneficiaries of the scheme would be decided by the expert committee of industry members.