Govt’s booster dose for Indian pharma industry to become self-reliant; 3 mega bulk drug parks likely soon

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Published: July 23, 2020 12:23 PM

The government has announced a production linked incentive (PLI) scheme for the promotion and manufacturing of pharmaceutical raw materials in India.

drug, PLI, medicine, manufacturing, atmanirbhar bharat, The government has decided to develop three mega bulk drug parks in partnership with states.

Taking cues from Prime Minister Narendra Modi’s Atmanirbhar Bharat campaign, the Ministry of Chemicals and Fertilizers announced a production linked incentive (PLI) scheme for the promotion and manufacturing of pharmaceutical raw materials in India. The government’s move is aimed to boost domestic manufacturing and cut dependence on imports of critical Active Pharmaceutical Ingredients (APIs). Further, the government has also decided to develop three mega bulk drug parks in partnership with states. These schemes will likely appeal more to the smaller players and should foster more investments especially on the Rs 200-500 million investment thresholds, said an Emkay research report. 

The report suggested that the new developments will not pose any threat to the players who are already in the market, instead, the newer entrants are expected to largely take the market share from China rather than the Indian counterparts. While India supplied doses of Hydroxychloroquine to the world and secured the trust of many countries, the latest move is likely to give more advantage to India amid disruptions from the Chinese side. India also aims to achieve self-reliance in ensuring the uninterrupted supply of drugs and affordable healthcare to its citizens. 

So far, India depends heavily on imports to fulfill its domestic drug requirements. Around 70 per cent of the drug requirements are met by imports. To cut this large-scale import, the government has decided to support the manufacturers for six years in the case of fermentation-based products and five years for chemically synthesised products. However, the scheme is only applicable to greenfield projects and will be for the registered eligible manufacturers in India. The total tenure of the scheme will be from FY21 to FY30 with an outlay of Rs 6,940 crore. 

Meanwhile, China’s dominance in bulk drugs is due to the regulatory support it gets from its government, which includes common facilities across plants and various subsidies, helping them to cut the cost considerably. Now, with similar support to Indian manufacturers, India too got a chance to become a leader in manufacturing pharmaceuticals, fulfilling its own requirements and exporting it to the world.

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