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This scheme aims to make India self-reliant in producing essential pharmaceutical raw materials like KSMs, DIs, and Read More... APIs, offering financial incentives to boost domestic manufacturing and reduce reliance on imports. Read less
Details
Are you a manufacturer looking to scale up your production of crucial pharmaceutical ingredients in India? The government's Production Linked Incentive (PLI) Scheme for Domestic Manufacturing of Critical Key Starting Materials (KSMs), Drug Intermediates (DIs), and Active Pharmaceutical Ingredients (APIs) is designed precisely for you.
What Is This Scheme?
This initiative by the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, is all about strengthening India's pharmaceutical sector. It aims to encourage the local production of 41 identified essential products, including critical APIs, that we currently import a lot of. The scheme provides financial rewards based on the increased sales of these domestically manufactured products.
Who Can Benefit From This Scheme?
The scheme specifically targets manufacturers who are setting up new, 'greenfield' projects in India. If you are planning to invest and manufacture eligible KSMs, DIs, or APIs within the country, this scheme can provide significant support. It's designed to attract substantial investments and build a robust domestic supply chain for vital pharmaceutical components.
Why This Scheme Is Important
India has a large pharmaceutical industry, but a significant portion of its KSMs, DIs, and APIs are imported. This scheme is a strategic move towards 'Atmanirbhar Bharat' (self-reliant India), aiming to reduce our dependence on foreign suppliers. By incentivizing domestic production, the scheme ensures a stable supply of essential medicines, enhances national health security, and creates jobs in the pharmaceutical sector.
Objective
Benefits
Under this scheme, a water connection is provided for a nominal fee of ₹100/- to eligible beneficiaries.
Sources and references
Eligibility Criteria
To be eligible for this scheme, manufacturers must meet the following criteria:
- The scheme is strictly for greenfield projects, meaning new manufacturing facilities.
- Only manufacturers registered in India who produce critical KSMs, Drug Intermediates, or APIs are supported.
- Applicants must meet specific threshold investment requirements for their greenfield projects. The investment thresholds vary based on the type of product segment:
- Fermentation-based (04 KSMs / Drug Intermediates): ₹400,00,00,000/-
- Fermentation-based (10 niche KSMs / Drug Intermediates / APIs): ₹50,00,00,000/-
- Key Chemical Synthesis-based (04 KSMs / Drug Intermediates): ₹50,00,00,000/-
- Other Chemical Synthesis-based (23 KSMs / Drug Intermediates / APIs): ₹20,00,00,000/-
- Being eligible for this scheme does not affect your eligibility for any other government scheme, and vice-versa.
How To Apply
The application process is managed through a designated Nodal Agency. Here’s a general overview:
- Prepare your application with all the required documents as per the scheme guidelines.
- Submit your application and required documents. Detailed information regarding the application documentation is available in the Guidelines, specifically in Annexure 1.
- The Project Management Agency (PMA), which is the Industrial Finance Corporation of India (IFCI), will evaluate your application and verify your eligibility.
- The Empowered Committee will then review and approve eligible applications for incentive disbursement.
Documents Required
When applying for this scheme, you will need to provide a comprehensive set of documents. These typically include:
- Proof of Business Constitution: This could be your Memorandum and Articles of Association, Partnership Deed, or any equivalent registration document. You'll also need to provide details of the shareholding pattern.
- Business Details:
- Self-certified copies of your PAN card and GST Certificate.
- Self-certified copies of the profile of your Chairman, CEO, Key Managerial Persons, including their PAN/DIN.
- Self-certified copies of your Annual Reports for the last 3 years, including audited financial statements and balance sheets. The most recent ones are essential.
- Credit History: A certificate confirming your creditworthiness from a Company Secretary, Board of Directors, Managing Partner, or the owner of a proprietorship firm.
- Key Personnel Information: Contact details (Name, Designation, Address, Phone, Email) for three senior employees of your company.
- Net Worth Certificate: A certificate from your Statutory Auditor or an Independent Chartered Accountant confirming the net worth of the applicant and/or group companies as of the application date.
- Financial Details: Self-certified financial details for the last 3 years.
- Details of your Research and Development facilities.
- Project Details and a Project Report for the eligible product.
- Information regarding Domestic Value Addition.
- Details of Application Fee payment.
- Official Sources: For detailed documentation requirements, refer to the Guidelines, particularly Annexure 1.
FAQ’s
What is the main goal of this PLI scheme?
The primary objective is to boost the domestic manufacturing of critical pharmaceutical raw materials like Key Starting Materials (KSMs), Drug Intermediates (DIs), and Active Pharmaceutical Ingredients (APIs) within India, thereby reducing our reliance on imports.
How long is the PLI scheme for bulk drugs valid?
The scheme is operational from the Financial Year 2020-21 up to the Financial Year 2029-30.
Which organization is managing this scheme?
The scheme is overseen by the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers. The actual implementation and project management are handled by a Nodal Agency, the Industrial Finance Corporation of India (IFCI).
What kind of projects are eligible for this scheme?
This scheme is exclusively for 'greenfield' projects, meaning it supports the establishment of new manufacturing facilities. Existing facilities are not eligible.
What are the financial incentives for products made through chemical synthesis?
Manufacturers of chemical synthesis-based products will receive a 10% incentive on their incremental sales, applicable from FY 2022-23 to FY 2027-28.
Can you explain the incentive structure for fermentation-based products?
Yes, for fermentation-based products, the incentive rate is set at 20% for the period 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 threshold investment required for 'Other Chemical Synthesis' products?
For 'Other Chemical Synthesis' products, which include 23 identified KSMs, Drug Intermediates, or APIs, the threshold investment required is ₹20,00,00,000/-.
How is the incentive calculated?
The incentives are calculated based on the incremental sales of the eligible products manufactured domestically. The assessment is done using details provided to government departments and verified by a Statutory Auditor.
Does applying for this scheme affect eligibility for other government schemes?
No, your eligibility for this scheme does not impact your eligibility for any other government scheme, and being part of another scheme does not affect your eligibility here.
Where can I find the official list of eligible products?
The list of 41 identified products, covering critical APIs and falling under four target segments, is detailed in Annexure B of the scheme's gazette notification. You can access it via the provided link in the 'Benefits' section.
What are the investment thresholds for fermentation-based products?
There are two categories for fermentation-based products: for 04 KSMs/Drug Intermediates, the threshold investment is ₹400,00,00,000/-. For 10 niche KSMs/Drug Intermediates/APIs, the threshold investment is ₹50,00,00,000/-.
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