On July 27, 2020, In order to boost domestic manufacturing of bulk drugs and medical devices parks in India, Union Minister for Chemicals and Fertilizers, Devaragunda Venkappa Sadananda Gowda launched guidelines for four schemes of Department of Pharmaceuticals (under ministry of chemical & fertilizers), two each for Bulk Drugs and Medical Devices parks, on the lines of making India Atma Nirbhar (self-reliant) in pharma sector.
Before heading towards the schemes let’s have a look at the Indian pharmaceutical industry.
Indian pharmaceutical industry is the 3rd largest in the world by volume and 14th largest in terms of value. India contributes 3.5% of total drugs and medicines exported globally. Currently India almost entirely depends on imports, mostly from China, for production/supply of 53 critical bulk drugs. 86% of medical devices, too, are imported. Notably, Bulk drugs accounted for 63% of the total pharmaceutical imports in the country during FY 2018-19.
- In March 2020, the Union Cabinet approved schemes to boost domestic manufacturing of critical bulk drugs and Active Pharmaceutical Ingredients (APIs) as part of Rs 10,000-crore production-linked incentive scheme. It was for the first time that an impetus of Rs 10,000 crore is provided to augment API production in India.
Now, let’s go through the schemes and their guidelines:
Scheme for Promotion of Bulk Drug Parks: Rs. 3,000 cr outlay to create 3 drug parks
The scheme for Promotion of Bulk Drug Parks, which has been approved by the Government of India (GoI) on March, 2020 was launched with an outlay of Rs. 3,000 crore for a period of 4 years i.e. from FY2020-2021 to FY2024-2025 to create 3 bulk drug parks in India. The scheme will be implemented through a State Implementing Agency (SIA), a legal entity, set up by the concerned State Government.
- The grant-in-aid will be 70% of the project cost of the common infrastructure facilities (CIF). In case of North Eastern States and Hilly States (i.e. Himachal Pradesh, Uttarakhand, Union Territories (UTs) of Jammu & Kashmir and Ladakh), the grant-in-aid will be 90% of the CIF.
- Maximum grant-in-aid for one bulk Drug Park is limited to Rs.1000 crore.
Scheme Promotion of Medical Devices Parks: Rs 400 cr outlay for 4 Medical Device Parks
The scheme for Promotion of Medical Devices Park, which has been approved by the GoI on March, 20, 2020 was launched with an outlay of Rs. 400 Crore for a period of 4 years i.e. from FY2020-2021 to FY2024-2025 to create Four Medical Device Parks in India. The Scheme will be implemented through a State Implementing Agency (SIA).
- The grant-in-aid will be 90% of the project cost of the CIF in case of North-East and hilly States and 70% in case of other States.
- Maximum grant-in-aid for one Medical Device Park will be limited to Rs 100 crore.
Production Linked Incentive (PLI) Scheme for Promoting Domestic Manufacturing of Medical Devices: Outlay Rs. 3,420 cr
The scheme for Promoting Domestic Manufacturing of Medical Devices has been launched with an outlay of Rs. 3,420 crore for a period of 6 years i.e. FY2020-21 to FY 2026-27.
-Eligibility: Any company registered in India and possessing a minimum net worth including group companies) of Rs.18 crore (30% of threshold investment of first year) is eligible for the scheme
-Target Segments: There are four target segments under the scheme which are as follows:
- Cancer care / Radiotherapy medical devices
- Radiology & Imaging medical devices (both ionizing & non-ionizing radiation products) and Nuclear Imaging devices
- Anesthetics& Cardio-Respiratory medical devices including catheters of Cardio Respiratory Category & Renal Care medical devices
- AII Implants including implantable electronic devices
PLI scheme for promotion of domestic manufacturing of KSMs, DIs, & APIs in India: Outlay Rs 6,490 cr
The PLI scheme for promotion of domestic manufacturing of Key Starting Materials (KSMs)/Drug Intermediates (DIs) / Active Pharmaceutical Ingredients (APIs) in India was launched with an outlay of Rs 6,490 crore for a period of 9 years i.e. from FY 2020-21 to FY 2029-30. The list of 41 products is contained in the scheme guidelines which will enable domestic production of 53 bulk drugs.
- Financial incentives will be given to a maximum of 136 manufacturers selected under the scheme.
-Eligibility: The Net Worth of the Applicant (including that of Group Companies), as on the date of application, shall not be less than 30% of the total proposed investment.
- The proposed Domestic Value Addition (DVA) by the applicant shall be at least 90% in case of fermentation based product and at least 70% in case of chemical synthesis based product.
Participants at launch event: Mansukh Laxmanbhai Mandaviya , Minister of State-MoS (Independent Charge) for Shipping and MoS for Chemicals & Fertilizers, Amitabh Kant, Chief Executive Officer (CEO) Niti Ayog, Dr P D Waghela, Secretary, Deptt of Pharmaceuticals.
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