General Studies IISchemes

PLI scheme for the Pharmaceutical Sector

Ministry of Chemicals and Fertilizers


The applications were invited for the PLI scheme for the Pharmaceutical sector

Key Highlights of PLI scheme:

  • The PLI Scheme for Pharmaceuticals is based on the strategy of “Atmanirbhar Bharat- Strategies for enhancing India’s manufacturing capabilities and enhancing exports in ten sectors”
  • The objective of the scheme is to enhance India’s manufacturing capabilities by increasing investment and production in the sector and contributing to product diversification to high value goods in the pharmaceutical sector.
  • One of the further objectives of the scheme is to create global champions out of India who have the potential to grow in size and scale using cutting edge technology and thereby penetrate the global value chains.
  • The scheme will provide financial incentives on the incremental sales (over Base Year) of pharmaceutical goods and in-vitro diagnostic medical devices to selected applicants based on pre-defined selection criteria. 
  • The incentives will be paid for a maximum period of 6 years for each participant depending upon the threshold investments and sales criteria to be achieved by the applicant.
  • The total quantum of the incentive for the scheme is Rs 15,000 crore.
  • SIDBI is the Project Management Agency for the Scheme.

Application process

  • The applications were invited in three different categories of applicants to ensure fair competition and broad coverage amongst the industry players.
  • The categories were based on the size of the applicant as determined by the global manufacturing revenues from pharmaceutical manufacturing. The scheme has received a very good response from the industry and a total of 278 applications were received by the closing date of 31.08.2021 against which a maximum of 55 applicants were to be selected.
  • The scheme covers three different product categories for which applicants have applied under the scheme. These products are expected to give an impetus to innovation, R&D and widening of product profile of India Pharmaceutical industry.
  • Category 1: Biopharmaceuticals; Complex generic drugs; Patented drugs or drugs nearing patent expiry; Cell based or gene therapy drugs; Orphan drugs; Special empty capsules like HPMC, Pullulan, enteric etc.; Complex excipients; Phyto-pharmaceuticals.
  • Category 2: Active Pharmaceutical Ingredients / Key Starting materials / Drug Intermediates (except the Active Pharmaceutical Ingredients / Key Starting materials / Drug Intermediates covered under the earlier PLI scheme for APIs/KSMs and DIs being implemented by the Department)
  • Category 3 (Drugs not covered under Category 1 and Category 2): Repurposed drugs; Auto immune drugs, anti-cancer drugs, anti-diabetic drugs, anti-infective drugs, cardiovascular drugs, psychotropic drugs and anti-retroviral drugs; In vitro diagnostic devices; Other drugs not manufactured in India.

How big is Indian Pharma Sector? 

  • From 2000-2019 Pharma sector alone contributed for FDI inflows worth $16.2bn and it is expected to rise during COVID pandemic. 
  • Recent Economic Survey acclaimed Pharma sector as one of the top 5 sector which reduce trade deficit of India 
  • More than 80% worlds Anti Retro-viral drugs depend on India 
  • India is the largest producer of vaccines even before COVID pandemic and controlled more than 50% of global supplies
  • Bio-Pharma is the largest sector contributing to 62% of the total revenue 
  • It is estimated that medical tourism in the country can grow and become a 9 billion dollars industry this year 
  • 20% of global generic medicine has been controlled by India. 

How Indian Pharma Sector is regulated? 

  • Under Drugs and Cosmetics Act 1940 was the central legislation that regulates India’s drug and cosmetic import, manufacture, distribution and sale. 
  • The Act clearly defines the spurious drugs, adulterated drugs and mis branded drugs
  • This also established the Central Drugs Standard Control Organization (CDSCO) 
  • The Act establishes the regulatory control over the manufacture and sale of drugs 
  • State Health department has to regulate the manufacturing, sales and distribution of drugs 
  • Drug Inspectors will control the implementation at ground level. 

Central Drugs Standard Control Organization (CDSCO) 

  • Central Drug Authority for discharging functions assigned under the Drugs and Cosmetics Act 
  • The CDSCO works in the Directorate General of Health services, is a division in Ministry of Health and Family welfare 
  • The CDSCO is headed by Drug Controller General of India (DCGI). 
  • It was advised by Drug Technical Advisory Board and Drug Consultative Committe 

Potential lead for enormous growth of Pharma Sector: 

  • The growing population of over a billion along with diversity among people offers An excellent centre for clinical trials 
  • Focus on low cost, efficient drugs lead to growth of the sector in terms of Value and Volume 
  • Low cost of production and Low R&D costs in India 
  • huge patient base from domestic and from foreign as a medical tourist 
  • Improving healthcare infrastructure in India 
  • An increase in lifestyle-related diseases such as diabetes, cardiovascular diseases, and central nervous system. 
  • Penetration of health insurance is increased 
  • Adoption of patented products by Indian Pharma Sector. 
  • Patent expiration and aging population in the US, Europe, and Japan

Challenges in the Pharma Sector: 

  • From regulator side 

  • Doing a post-mortem kind of work by inspecting the drugs after getting into market 
  • Low data collection on drugs coupled with insufficient training to drug inspector leading to huge malpractice among drug sellers  

  • From Marketing side 

  • Medical representatives and drug sellers inefficient training to meet the man power along with prevalence of Quack(fake doctor) increases risk of life of patients 
  • Pharma companies unethical pratice of providing freebies and gifts to Doctors to promote their drugs 
  • Quality is getting compromised due to high demand for drugs among people. This is evident by wide scale recall of drugs in India. 
  • Low R&D investment: India only invests 0.7% of its GDP for research and investment. This is very low compare to the demand in the sector 

  • International Challenges 

  • Global Pharma companies accuse Indian pharma companies as an abuser of Patent laws and criticise India’s Compulsory Licensing Policies. 
  • India nearly 90% depend on China for its Active Pharmaceutical Ingredients 


  • Implementing the recommendation of Malshekar committee on drug regulation 

  • Recommend a new structure for the Drug Regulatory System in the country including the setting up of a National Drug Authority 
  • Recommended that the State Drug Control Organisations should be urgently strengthened. 
  • Creating a Digital Database for patients, drug usage and risk associated with the intake of drug 
  • Revise the ethical code for Pharma companies to discontinue freebies and gifts 
  • Government need to Upgrade the quality standards and qualities of Medical representatives and drug sellers. 
  • Promote country specific research for R&D and increasing the R&D spending  
  • Rework with the IPR policies to make Indian Pharma companies for encouraging more patents. 
  • Government need to frame a National Plan on self-sustaining in API’s and avoid over dependence on China. 
  • Government need to frame a policy to Utilise the traditional Knowledge in drug manufacturing 

Source: PIB  

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