Govt notifies incentive schemes for API/medical devices manufacturing, check details

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Published: July 24, 2020 4:40 AM

Indian pharmaceutical industry is the third largest in the world by volume and 14th largest in terms of value. India contributes 3.5% of total drugs and medicines exported globally.

Under the scheme, financial incentives will be provided on sales of 41 identified products for six years. For fermentation based products, the incentive for FY24 to FY27 would be 20%.

The Centre on Thursday notified four schemes to promote domestic manufacturing of bulk drugs and medical devices, entailing a combined budgetary outgo of about Rs 12,000 crore over multiple years. The schemes include production-linked incentives and assistance to production infrastructure creation. Currently, India is overly dependent on China for supply of drug intermediates (DIs) and active pharmaceutical ingredients (APIs), making it vulnerable to any disruption in the supply of drugs, which can have a significant adverse impact on drug security of the country.

According to a notification issued by the department of pharmaceuticals, the production linked incentive (PLI) scheme for promotion of domestic manufacturing of critical key starting materials (KSMs)/ DIs and APIs, is designed to accord benefits to the tune of Rs 6,940 crore to greenfield projects.

Under the scheme, financial incentives will be provided on sales of 41 identified products for six years. For fermentation based products, the incentive for FY24 to FY27 would be 20%, that for FY28 would be 15% and it would be 5% for FY29. For chemical synthesis based products, the incentive for FY23 to FY28 would be 10%.

Under the PLI scheme to promote domestic manufacturing of medical devices, Rs 3,420 crore has been earmarked. The domestic medical devices market in India is heavily dependent on imports which contribute to more than 85% of the market. Under the scheme, financial incentives will be given to selected companies at the rate of 5% of incremental sales (over base year) of goods manufactured in India and covered under target segments, for a period of five years through FY26.

In the scheme for promotion of medical device parks, a provision of `400 crore has been made for the creation of common infrastructure facilities in four Medical Device Parks proposed by state governments and selected under the scheme. In the scheme for promotion of bulk drug parks, a provision of `1,000 crore to provide financial assistance to a selected bulk drug park.

Indian pharmaceutical industry is the third largest in the world by volume and 14th largest in terms of value. India contributes 3.5% of total drugs and medicines exported globally. However, despite these achievements, India is significantly dependent on import of some of the basic raw materials, viz. bulk drugs that are used to produce the finished dosage formulations. India imports bulk drugs largely for economic considerations. Bulk drugs accounted for 63% of the total pharmaceutical imports in the country during FY19.

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