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Aurobindo Pharma, Karnataka Antibiotics & Kinvan Bagged 1st 5 Projects Under PLI scheme

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First set of five bulk drug, pharma input projectsOn January 22, 2021, the Central Government gave its consent for first set of five pharma projects with the total committed Investment of Rs 3,761.17 crore. It was approved under the Production Linked Incentive (PLI) scheme for promoting domestic manufacture of bulk drugs and active pharmaceutical ingredients (APIs).

  • The projects are related to the four fermentation-based key starting materials which are all entirely imported now.
  • These are bagged by Hyderabad (Telangana) based Aurobindo Pharma, Bengaluru (Karnataka) based Karnataka Antibiotics & Pharmaceuticals, and Kinvan Pvt Ltd located in Mumbai, Maharashtra.
  • These projects will generate employment of about 3825.

The allocation of first set of five projects/products to relevant entities is shown in the following table:

Entity Product Production Capacity (tonne) Investment (cr)
Aurobindo Pharma Pvt Ltd (through LyfiusPharmaPvt. Ltd.) Penicillin G 15000 Rs 1392
Aurobindo Pharma (through Qule Pharma Pvt. Ltd.) Erythromycin thiocyanate (TIOC) 1600 Rs 834
Aurobindo Pharma (through LyfiusPharmaPvt. Ltd.) 7-ACA (Aminocephalosporanic acid) 2000 Rs 813
Karnataka Antibiotics & Pharmaceuticals’ 7-ACA 1000 Rs 275
Kinvan Pvt Ltd Clavulanic Acid 300 Rs 447.17

The production of above mentioned products is expected to commence production by April 2023. The entities will get a maximum of Rs 3,600 crore PLI from Government of India for over the next six years. If they meet the assigned production targets, they will get 20% incentive for FY24 to FY27, 15% for FY28 and 5% for FY29.

Note – Indian pharmaceutical industry is the 3rd largest in the world by volume.

Background of APIs:

There are 53 import dependent APIs that were identified by an expert committee set up by the Department of Pharmaceuticals, Ministry of Chemicals and Fertilisers (MoC&F). They accounted for 63% of the total pharmaceutical imports. Afterwards, a Committee headed by Amitabh Kant, CEO (Chief Executive Officer) NITI (National Institution for Transforming India) Aayog, was set in 2020 to design the PLI scheme for domestic manufacturing of APIs and bulk drugs.

  • In this regard, MoC&F invited applications for manufacturing 36 APIs and bulk drugs in four target segments (two fermentation based and two chemical synthesis) under the PLI scheme till November 30, 2020.
  • The total incentives approved for the scheme are Rs 6,940 crore.

The Government will approve applications in the other three categories over the next 45 days.

Additional Info:

–An API is the ingredient in a pharmaceutical drug or pesticide that is biologically active.

–The PLI scheme provides benefits to companies who make commitments to incremental revenues over the base year. It encourages investments in domestic manufacturing thereby promoting exports and reducing dependence on imports.

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ii.In the Ongoing 63rd session of the United Nations Commission on Narcotic Drugs (UN-CND), Cannabis has been removed from the “Most Dangerous Drug” category. It is removed after UNCND voted to remove cannabis and cannabis resin from Schedule IV of the 1961 Single Convention on Narcotic Drugs.

About Ministry of Chemicals and Fertilisers (MoC&F):
Union Minister– Devaragunda Venkappa Sadananda Gowda (Constituency – Bangalore North, Karnataka)
Minister of State (I/C)– Mansukh Laxmanbhai Mandaviya (Constituency – Gujarat – Rajya Sabha)