PLI Scheme For API,KSM In Pharmaceutical Sector: First Trance Of Incentives Worth Rs 165.74 Crore Released To 4 Firms Including Dr Reddy's Lab, Biocon

Four pharmaceutical companies have received the first tranche of incentives of up to Rs. 165.74 crores under the Product Linked Incentive (PLI) scheme from the Department for Pharmaceuticals (DoP).

Four firms- Dr Reddy's Laboratories Limited, Biocon Limited, Strides Pharma Science Limited and Premier Medical Corporation Private Limited - received production-linked incentives under the scheme.

"The Department has received an incentive claim of about Rs 544 crores from 15 applicants. Based on the evaluation, Rs 221 crores of claims of incentives from four applicants were found to be eligible and 75% of this amount i.e., Rs 165.74 crore, has been released. Remaining incentives are under examination," the Department of Pharmaceuticals said in an official statement.

16 companies, including Sun Pharmaceutical Industries, Aurobindo Pharma, Dr Reddy's Laboratories, Lupin, Mylan Laboratories, Cipla and Cadila Healthcare, were selected under the PLI scheme for the promotion of domestic manufacturing of critical Key Starting Materials (KSMs)/ Drug Intermediates and Active Pharmaceutical Ingredients (APIs) in the country.

Under the Atmanirbharta initiative, DoP launched the Rs 15,000 crore PLI scheme in 2021 to boost indigenous production of active pharmaceutical ingredients, which are the key raw materials in manufacturing drugs.

The financial year of 2022-2023 being the first year of production for the PLI Scheme, DoP has earmarked Rs 690 crores as the budget outlay for payment of incentives. The incentives for incremental sales to selected participants under these categories are at a varying rates over the years ranging from 10% to 3% during the scheme's tenure.

Against the expected investment of Rs 17,425 crore in the pharmaceutical sector over the scheme period, the scheme has garnered an investment of Rs 16,199 crore by these 55 applicants in the first year of implementation itself, the ministry said. Against the expected employment of 1 lakh over six years scheme period, 23,000 people have been given employment so far, it added.

The Indian pharmaceutical industry is the third largest in the world by volume. It has a high market presence in several advanced economies such as the US and EU. The industry is well known for producing affordable medicines, particularly in generics.

However, the country is significantly dependent on importing basic raw materials, viz., bulk drugs used to produce medicines. In some specific bulk drugs, the import dependence is 80 to 100 per cent.

Under the PLI scheme for bulk drugs with a financial outlay of ₹6,940 crore, the objective is to boost the domestic production of 41 select critical bulk drugs in the country.

So far, it added that 51 projects had been selected for the 34 notified bulk drugs. Moreover, it said 21 applicants had been selected under the PLI scheme for medical devices with a financial outlay of ₹3,420 crore.