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This scheme offers financial incentives to selected manufacturers of pharmaceutical goods and in-vitro diagnostic medical devices, based  Read More... on their increased sales over a base year. Read less

Details

India is boosting its pharmaceutical manufacturing sector with the Production Linked Incentive (PLI) Scheme. This initiative by the Ministry of Chemicals and Fertilizers aims to encourage more investment and production in the industry, leading to a wider variety of high-value pharmaceutical products.

What is the Pharma PLI Scheme?

The PLI Scheme for Pharmaceuticals provides financial rewards to companies that increase their sales of specific pharmaceutical goods and in-vitro diagnostic medical devices. These incentives are calculated on the extra sales achieved compared to a base year.

Who Can Benefit?

The scheme is designed for manufacturers of pharmaceutical products registered in India. Different categories of manufacturers, including large companies and MSMEs, can apply based on their existing revenue and investment capacity.

Why is this Scheme Important?

By incentivizing increased production and sales, the scheme aims to strengthen India's position as a global manufacturing hub for pharmaceuticals. It also promotes the development and production of diverse, high-value medical products within the country.

Objective

This scheme offers financial incentives to selected manufacturers of pharmaceutical goods and in-vitro diagnostic medical devices, based on their increased sales over a base year.

Benefits

Category A Forest Areas (Kanha, Bandhavgarh, Pench Tiger Reserve, Ratapani Tiger Reserve & adjacent National Parks & Sanctuaries)
  • The beneficiary receives a Capital Subsidy of 20% on the approved fixed capital investment.
  • The maximum ceiling of the subsidy is ₹1,00,00,000/-.
  • Category B Forest Areas (Panna & Satpuda Tiger Reserve and adjacent National Parks & Sanctuaries)
  • The beneficiary receives a Capital Subsidy of 20% on the approved fixed capital investment.
  • The maximum ceiling of the subsidy is ₹2,00,00,000/-.
  • Category C Forest Areas (Sanjay Dubri Tiger Reserve, Kuno National Park, Veerangana Durgavati Tiger Reserve, Madhav National Park, Gandhi Sagar, other protected areas, and new entry routes of Category A and B)
  • The beneficiary receives a Capital Subsidy of 20% on the approved fixed capital investment.
  • The maximum ceiling of the subsidy is ₹3,00,00,000/-.
  • Conditions
  • The unit must remain in continuous operation for at least three years from the date of availing the subsidy.
  • The unit must submit a self-declaration regarding continuous operation on or before the 15th of April every year.
  • If the unit closes within 1 year of receipt of subsidy, 80% of the subsidy amount must be refunded.
  • If the unit closes within 2 years of receipt of subsidy, 60% of the subsidy amount must be refunded.
  • If the unit closes within 3 years of receipt of subsidy, 50% of the subsidy amount must be refunded.
  • Sources and references

    Eligibility Criteria

    To be considered for the scheme, applicants must meet certain common criteria and group-specific requirements.

    Common Eligibility for All Applicants

    • You must be a manufacturer of pharmaceutical goods registered in India.
    • Your manufacturing activities must be for eligible pharmaceutical products listed under the scheme's three categories.
    • You cannot claim incentives for the same product under this scheme and the PLI Scheme for Bulk Drugs or any other PLI scheme.

    Group A Applicants

    • Your Global Manufacturing Revenue for pharma goods or in-vitro diagnostic medical devices should be ₹50,000 crores or more in FY 2019-20.
    • You need to achieve a minimum cumulative investment of ₹1,000 crores over 5 years.
    • You must achieve a minimum turnover of ₹50 crores from eligible products in the first year (FY 2022-23).

    Group B Applicants

    • Your Global Manufacturing Revenue for pharma goods or in-vitro diagnostic medical devices should be between ₹500 crores and ₹5,000 crores in FY 2019-20.
    • You need to achieve a minimum cumulative investment of ₹250 crores over 5 years.
    • You must achieve a minimum turnover of ₹10 crores from eligible products in the first year (FY 2022-23).

    Group C Applicants

    • Your Global Manufacturing Revenue for pharma goods or in-vitro diagnostic medical devices should be less than ₹500 crores in FY 2019-20.
    • You need to achieve a minimum cumulative investment of ₹50 crores over 5 years.
    • You must achieve a minimum turnover of ₹1 crore from eligible products in the first year (FY 2022-23).

    Group C (MSME) Applicants

    • You must be classified under the Micro, Small and Medium Enterprises (MSME) category within Group C.
    • You need to achieve the committed investment amount over a period of 5 years.
    • You must achieve a minimum turnover of ₹50 lakhs from eligible products in the first year (FY 2022-23).

    Continuation Criteria

    • To keep receiving incentives from FY 2023-24 onwards, you must achieve a 7% growth in sales compared to the previous financial year.

    How To Apply

    Applications for this scheme are handled online. Here’s a general idea of the process:

    1. Eligible manufacturers need to apply through the official online portal managed by the Project Management Agency.
    2. Ensure all required documents are ready before starting the application.
    3. Submit your application form along with all necessary details and supporting documents online.
    4. Selected applicants will be notified and will need to follow further steps, including submitting a bank guarantee and undertaking.

    For the most current application link and detailed instructions, please refer to the official website of the Department of Pharmaceuticals.

    Documents Required

    To apply and claim benefits under the scheme, you will likely need the following documents:

    • Audited Financial Statements
    • Cost Accountant Certificate for Production Cost Certification
    • Bank Guarantee (required after selection)
    • Undertaking (required after selection)
    • Product Registration Documents
    • Self-Certified Quarterly Review Report

    Official Sources

    For precise document formats and submission guidelines, please consult the official notifications and portal for the PLI Scheme for Pharmaceuticals.

    FAQ’s

    What is the minimum Global Manufacturing Revenue needed to be considered for Group A under this scheme?

    To be eligible for Group A, your company's Global Manufacturing Revenue for pharmaceutical goods or in-vitro diagnostic medical devices must be at least ₹50,00,00,00,000/- (₹5,000 crores) in the Financial Year 2019-20.

    Can the cost of purchasing land for a new manufacturing unit be included in the scheme's eligible investment calculation?

    No, expenses related to acquiring land for the project or manufacturing unit are not counted as eligible investment under this scheme.

    How much of a sales increase is required each year to continue receiving incentives after the first year?

    From the Financial Year 2023-24 onwards, applicants must achieve a 7% growth in sales over the previous financial year to be eligible for incentives.

    What is the base financial year used to calculate sales growth for the incentive program?

    The scheme uses the Financial Year 2019-20 as the base year for calculating incremental sales and for determining eligibility criteria.

    After being selected, how long do applicants have to submit the required bank guarantee and undertaking?

    Selected applicants must provide the bank guarantee and an undertaking within two weeks from the date they receive the official approval letter.

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