As per media reports, dated August 27, 2020, some provisions in the government’s production-linked incentive (PLI) scheme for drugs have caused worries for the Indian pharmaceutical industry. PIL is for the promotion of medical device parks, for which a provision of Rs 400 crore has been made for the creation of common infrastructure facilities in four parks, proposed by state governments. Under the scheme, a provision of Rs 1,000 crore has been made to provide financial assistance to a selected bulk drug park.
Provisions of the Scheme
Some of the provisions of the scheme are as follows:
(i) As per the scheme, any company, partnership firm, proprietorship firm or a limited liability partnership (LLP), registered in India, possessing a minimum net worth of 30 per cent of proposed investment is eligible to apply for incentives under the scheme.
(ii) The scheme allows only greenfield projects and promotes domestic manufacturing of identified critical key starting materials (KSMs), drug intermediates (DIs), and active pharmaceutical ingredients (APIs) in India.
(iii) The incentives will be given to a maximum of 136 manufacturers at a fixed percentage of their domestic sales of 41 products, manufactured locally with value addition.
(iv) There is 65 per cent of sale price marking in the scheme.
(v) The threshold investment should not be treated as double and this needs to get reconsideration.
(vi) Maximum incentive per eligible product and per selected applicant, needs justification on investment versus return.
(vii) The scheme is not applicable to APIs, manufactured from the certain eligible KSM products.
India Pharmaceutical Industry
The domestic pharmaceutical industry of India is the world’s third largest by volume and 13th largest by value. It generates over US$ 11 billion in trade surplus yearly and is among the top five sectors contributing to the reduction of India’s trade deficit. India also contributes about 57 per cent of APIs to prequalified list of the World Health Organization (WHO).
However, India imported low-cost intermediates and APIs from China around ` 249 billion worth of bulk drugs in 2019, compared with ` 193 billion worth of purchases in 2018.
Courtesy: livemint.com
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