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Home / News / India /  Govt removes minimum investment norms for bulk drug PLI scheme

NEW DELHI: The government on Thursday revised guidelines for its production-linked incentive (PLI) scheme for drug ingredients and medical device makers by removing the eligibility criterion of minimum investment and replacing it with a commitment to spend in ramping up capacity.

“The change has been made to encourage efficient use of productive capital as the amount of investment required to achieve a particular level of production depends upon choice of technology and it also varies from product to product," the department of pharmaceuticals (DoP), which is the implementing agency of the schemes, said.

The government has also deleted the provision which restricted sales of products manufactured under the scheme for domestic market only, effectively making exports of the products also eligible for incentive.

The DoP has made changes to minimum annual production capacity for 10 products for some products like tetracycline, neomycin, para amino phenol (PAP), meropenem, artesunate, losartan, telmisartan, acyclovir, ciprofloxacin and aspirin. Minimum annual production capacity is part of the eligibility criteria under the scheme to ensure that companies seeking incentives manufacture at scale.

The government has extended the deadline for receiving applications under the scheme to 30 November from 23 November.

Mint had reported on Wednesday that the government was planning to remove minimum investment norms laid down for eligibility for its production-linked incentive (PLI) scheme for drug ingredients and medical device makers, and also extend deadline for participating in the scheme.

The 6,940 crore bulk drug PLI scheme is crucial for India’s drug security as it is aimed at reducing domestic pharmaceutical companies' dependence on China for key raw materials. The medical device PLI scheme is aimed at improving India’s production of medical devices as currently over 80% of medical devices are imported.

However, when the schemes were announced in July, the government had set a minimum investment limit of 400 crore for companies to avail benefits for setting up a unit to manufacture four fermentation-based bulk drugs, including Penicillin G and erythromycin thiocyanate. It had also set investment limits of 20-50 crore to avail benefits for setting up manufacturing units of 37 other bulk drugs.

For medical device plants, the investment limit was set at 180 crore for over a three-year period.

Bulk drug and medical device manufacturers had complained that the schemes were too restrictive. DoP had received several suggestions and inputs from the pharmaceutical and medical device industry seeking certain amendments in the scheme to enable effective participation of the industry in the two schemes. The suggestions were examined by the respective technical committees formed under the schemes.

Recommendations of the technical committees were then placed before an empowered committee chaired by NITI Aayog chief executive officer Amitabh Kant, which last week approved the changes.

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