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This scheme aims to make India self-reliant in critical drug ingredients by offering financial incentives on the Read More... domestic sales of Key Starting Materials (KSMs), Drug Intermediates (DIs), and Active Pharmaceutical Ingredients (APIs). Read less

Details

In a major push towards 'Make in India' in the pharmaceutical sector, the Government has launched a significant Production Linked Incentive (PLI) scheme. This initiative is designed to boost the domestic manufacturing of essential drug components, reducing our reliance on imports.

What Is This Scheme?

The Production Linked Incentive (PLI) Scheme for Promotion of Domestic Manufacturing of Critical Key Starting Materials (KSMs)/ Drug Intermediates (DIs) and Active Pharmaceutical Ingredients (APIs) in India is an effort by the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers. It provides financial incentives to manufacturers based on their incremental sales of identified critical drug materials produced in India. The focus is on 41 specific products that are vital for our pharmaceutical needs. This scheme specifically encourages large investments and is applicable only for new, greenfield projects.

Who Can Benefit From This Scheme?

This scheme is for Indian manufacturers who are looking to set up new (greenfield) projects to produce critical Key Starting Materials (KSMs), Drug Intermediates (DIs), and Active Pharmaceutical Ingredients (APIs). It aims to support businesses willing to invest significantly in expanding India's capacity for these essential pharmaceutical building blocks.

Why This Scheme Is Important

India is a global leader in pharmaceuticals, but we still depend on imports for many crucial raw materials and drug intermediates. This PLI scheme is a strategic move to strengthen our domestic pharmaceutical ecosystem. By encouraging local production of these critical components, the scheme aims to ensure a stable supply chain, reduce import costs, and ultimately make essential medicines more accessible and affordable within the country. It's a vital step towards achieving 'Atmanirbhar Bharat' in the pharmaceutical sector.

Objective

This scheme aims to make India self-reliant in critical drug ingredients by offering financial incentives on the domestic sales of Key Starting Materials (KSMs), Drug Intermediates (DIs), and Active Pharmaceutical Ingredients (APIs).

Benefits

Under this scheme, a water connection is provided for a nominal fee of ₹100/- to eligible beneficiaries.

Sources and references

Guidelines (Page No. 265)

Eligibility Criteria

To be eligible for this scheme, manufacturers must meet the following conditions:

The scheme is applicable exclusively for greenfield projects (new manufacturing units).
Applicants must be registered manufacturers in India producing critical KSMs/DIs and APIs.
Eligibility is subject to achieving a threshold investment in greenfield projects as specified in the table below:

Eligibility Threshold Investment Criteria:

S. No	Segment	Threshold Investment
1.	Fermentation based 04 KSMs /Drug Intermediates	₹400,00,00,000/-
2.	Fermentation based 10 niche KSMs / Drug Intermediates / APIs	₹50,00,00,000/-
3.	Key Chemical Synthesis based 04 KSMs /Drug Intermediates	₹50,00,00,000/-
4.	Other 23 Chemical Synthesis based KSMs / Drug Intermediates / APIs	₹20,00,00,000/-

Participation in this scheme does not affect eligibility for any other government schemes, and vice-versa.

How To Apply

The scheme is managed by a nodal agency, the Industrial Finance Corporation of India (IFCI), which acts as the Project Management Agency (PMA). Interested manufacturers need to follow the application process outlined in the scheme guidelines.

Detailed information regarding the application process and documentation can be found in the official Guidelines, specifically in Annexure 1.

Documents Required

Applicants are required to submit a comprehensive set of documents for the application process. These include:

Proof of Business Constitution: Memorandum and Articles of Association, Partnership Deed, or equivalent registration documents, along with shareholding patterns.
Business Details: Self-certified copies of PAN and GST Certificate for the applicant.
Key Personnel Information: Self-certified copies of PAN/DIN for Chairman, CEO, CXOs, Promoter, and Key Managerial Persons, along with their profiles.
Financial Records: Self-certified financial details for the last 3 years. This includes recent Annual Reports, audited Balance Sheets, and schedules.
Credit History: A certificate confirming credit history from a Company Secretary, Board of Directors, Managing Partner, or Owner of a Proprietorship Firm.
Contact Details: Contact information for three senior employees, including their name, designation, address, phone number, and email.
Net Worth Certificate: A certificate of the applicant's and/or group companies' net worth as of the application date, issued by a Statutory Auditor or Independent Chartered Accountant.
Project Details: Information on the Research and Development facility, project specifics, domestic value addition, and a detailed Project Report for eligible products.
Application Fee: Proof of payment for the application fee.

Official Sources

For detailed information on the documentation required, please refer to the Guidelines available at: Annexure 1.

FAQ’s

What is the main goal of this PLI scheme?

The primary goal is to strengthen India's capability in producing critical pharmaceutical ingredients like Key Starting Materials (KSMs), Drug Intermediates (DIs), and Active Pharmaceutical Ingredients (APIs) domestically, thereby reducing our dependence on imports.

For how long is this scheme valid?

The scheme is valid for a tenure from the Financial Year 2020-21 up to FY 2029-30.

What kind of investment does the scheme support?

This scheme is specifically designed to encourage investments in new, greenfield projects within the pharmaceutical sector.

What financial incentive can manufacturers expect?

Manufacturers receive a financial incentive based on their incremental sales of the identified eligible products over a period of six years.

Which products are covered under this scheme?

The scheme covers 41 identified products, which include various critical Key Starting Materials, Drug Intermediates, and Active Pharmaceutical Ingredients, detailed across four target segments.

What are the incentive rates for fermentation-based products?

For fermentation-based products, the incentive is 20% from FY 2023-24 to FY 2026-27. This reduces to 15% in FY 2027-28 and further to 5% in FY 2028-29.

What is the incentive percentage for chemical synthesis-based products?

Chemical synthesis-based products will receive a 10% incentive from FY 2022-23 until FY 2027-28.

Who manages the implementation of this scheme?

The scheme is managed by a Project Management Agency (PMA) appointed for this purpose, which is the Industrial Finance Corporation of India (IFCI).

Can a company apply if they are already receiving benefits from another scheme?

Yes, being eligible or receiving benefits from this scheme does not affect your eligibility for any other government scheme, and vice versa.

What is the minimum investment required to qualify?

The threshold investment varies by segment, ranging from ₹20,00,00,000/- for some chemical synthesis products to ₹400,00,00,000/- for specific fermentation-based KSMs/Drug Intermediates.

Where can I find detailed application guidelines?

Detailed guidelines, including specific documentation requirements, are available in Annexure 1 of the official scheme document, which can be accessed via the provided link.