Home / Industry / Manufacturing /  Fresh push for APIs under PLI scheme to counter Chinese dominance

The government has extended the last date for applications for manufacturing Active Pharmaceuticals Ingredients (APIs) under the PLI scheme after the sops it offered failed to create the expected response, people aware of the development said.

China’s dominance in APIs, an essential input for drug development of even the most basic kinds such as painkillers, has left New Delhi susceptible to supply chain disruptions, including from repeated lockdowns in China, which is the largest world’s largest manufacturer and exporter of APIs.

“For 7 [kinds of] APIs, for which we don’t have people (applications) yet, we are again calling for application. And the last date for applying is 21 November. We understand that PLI 2.0 is going as per the plan and the aim is to cover all the major pharma products under PLI pharma. As of now, it is too early to say anything about which PLI pharma scheme is going well because none of them have crossed the production year," said a government official on condition of anonymity.

The Department of Pharmaceuticals rolled out three PLI schemes—bulk drugs with an outlay of 6,940 cr, medical devices ( 3,420 cr) and pharmaceuticals ( 15,000 cr) to help cut dependency on China.

However, the experts said the subsidy offered by the government was not enough to attract the investment required to begin large scale manufacturing. “As far as bulk drugs are concerned, about 14 projects have been commissioned with an investment of 612 cr. The incentive rates that we are offering is 20% for the first year, 15% for the fifth year and 5% for sixth year," another official said.

“Many items imported from China are in form of raw materials including APIs, drug formulations and parts of machinery which are used for producing finished goods for exports. China accounted for over 43% of the total pharma imports worth $4,066 mn between Apr -Sept this year. But India exported pharma products worth $12,727 mn during the same duration," the official added.

Sanjeev Jain, MD, Akums Drugs & Pharmaceuticals said: “The scheme is expected to promote the production in the country and increase the value addition in exports as well as create a positive impact on the pharmaceutical market revenues in the times to come. However, it’s too early to see direct impact on revenue as of now."

Trade experts said India used to be self- sufficient in API production but cheaper alternatives from China resulted in the closure of those manufacturing units. “It is after covid-19 and Russia-Ukraine war that a lot of countries have realised the consequence of over-dependence on China for critical items like semi-conductors and APIs. India used to be self-sufficient in making APIs but cheaper alternatives resulted in the shutting down of manufacturing in India. Getting those back will not just happen due to the subsidy offered. An entire ecosystem to support manufacturing of critical items will be needed," a trade expert said.

As per the CII, Chinese active ingredients are about 20% to 30% cheaper than Indian products and incentives ranging up to 20% under PLI could help bridge the gap.

Queries emailed to department of pharmaceutical spokesperson and ministry of commerce remained unanswered till press time.

ravi.dutt@livemint.com

Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less

Recommended For You

Trending Stocks

×
Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout