PLI scheme for the Pharmaceutical Sector

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CS Lalit Rajput
CS Lalit Rajput
Company Secretary having 5 years of post-qualification experience in the Compliance Management Services industry by serving Corporates including Listed Companies, Corporate Secretarial Firms, and LLP.

“Worth Rs 15, 000 crore incentives for Pharma Industry”

A Production-Linked Incentive, or PLI scheme, provides incentives in the form of tax rebates, import and export duty concessions, or maybe easier land-acquisition terms etc. to companies in order to boost domestic manufacturing. This is done by the government in an effort to make products more competitively priced, reduce a country’s dependence on imports and generate employment. PLIs are essentially the incentives to companies to boost product.

The PLI Scheme for Pharmaceuticals is based on the strategy of “Atmanirbhar Bharat. The Operational Guidelines for the scheme inviting applications from the pharmaceutical industry were issued on 01.06.2021 by the Department of Pharmaceuticals after intensive consultation with industry and related departments and NITI Aayog.

Also read: Don’t skip this step to avoid rejection of your tax refund Filling ITR

Key Objectives:

  • 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.
  • 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.

Key Highlights:

  1. Presently 55 companies have qualified for the production linked incentive (PLI) scheme for the pharmaceutical sector.
  2. The list of Qualified Companies as mentioned above includes such big players as Sun Pharmaceuticals, Cipla, Dr Reddy’s Laboratories, Glenmark Pharmaceuticals, Wockhardt, Biocon, Biological E, Panacea Biotec, Torrent Pharma, Aurobindo Pharma, Intas Pharma, Natco Pharma and Lupin.
  3. The scheme will provide financial incentives of ₹15,000 crore on the incremental sales of pharmaceutical goods and in-vitro diagnostic medical devices to these companies over six years.
  4. SIDBI is the project management agency and has put in place a digital mechanism for business processes being followed under the scheme.
  5. The beneficiaries approved for the scheme also include 20 MSMEs (micro, small and medium enterprises), according to a Ministry of Chemicals and Fertilisers release.
  6. The scheme covers three different product categories as mentioned below:
Category 1 Category 2 Category 3
Biopharmaceuticals; Complex generic drugs; Patented drugs or drugs nearing patent expiry; Cell based or gene therapy drugs; Orphan drugs; Special empty capsules like HPMC, Pullulan, enteric etc.; Complex excipients; Phyto-pharmaceuticals. Active Pharmaceutical Ingredients / Key Starting materials / Drug Intermediates (except the Active Pharmaceutical Ingredients / Key Starting materials / Drug Intermediates covered under the earlier PLI scheme for APIs/KSMs and DIs being implemented by the Department) (Drugs not covered under Category 1 and Category 2): Repurposed drugs; Auto immune drugs, anti-cancer drugs, anti-diabetic drugs, anti-infective drugs, cardiovascular drugs, psychotropic drugs and anti-retroviral drugs; In vitro diagnostic devices; Other drugs not manufactured in India.
  1. The detailed scheme guidelines available on the website of the Department at: Click Here
  2. The Group A consists of 11 selected applicants, Group-B consists of 9 selected applicants and Group-C consists of 35 selected applicants of which there are 20 MSMEs.
  3. The selection of applicants in each of the three categories has been approved by the Minister for Chemicals and Fertilizers.
  4. A robust monitoring framework will also be put in place to track the progress of the scheme.

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