Last updated: August 22nd, 2024 5:15 PM

Bulk Drug Park and Production Linked Incentive (PLI) Scheme

As part of the multi-pronged response to the medical emergency prevailing in the country due to the COVID-19 pandemic, the Government of India has approved the following schemes to promote drug manufacturing and exports in the country.

• The scheme on the Promotion of Bulk Drug Park
• Production Linked Incentive (PLI) Scheme for Promoting Domestic Manufacturing of raw materials

The Covid-19 outbreak has resulted in a complete stoppage of the import of bulk drug and Active Pharmaceutical Ingredients (APIs) to India. The scheme on Promotion of Bulk Drug Park aims to promote the pharmaceutical industry and to ensure Drug security, self-sufficiency, and continuous supply of essential medicines to Indians at affordable prices. Production Linked Incentive (PLI) Scheme will reduce India’s import dependence on other countries for raw materials. As part of the scheme, the Government will provide incentives to manufacture pharmaceutical products.

Promotion of Bulk Drug Parks

To increase the competitiveness, easy access to standard testing and infrastructure facilities, and value addition in the domestic bulk drug industry, Scheme on Promotion of Bulk Drug Parks has been launched.

Objective

The objective of the scheme on the Promotion of Bulk Drug Parks is as follows:

• To Set up Bulk Drug Parks to guarantee drug security and reducing import dependence on Active Pharmaceutical Ingredients (APIs). To strengthen the existing infrastructure facilities and to make Indian Bulk Drug Industry a global leader
• Easy access to standard testing and infrastructure facilities and value addition in the domestic Bulk Drug Industry through the creation of world-class Common Infrastructure Facilities for increased competitiveness
• To help industry meet the requirements of standards of the environment at a reduced cost through innovative methods of common Waste Management System.
• Exploit the benefits arising due to the optimization of resources and economies of scale.

Financial Assistance

The Scheme on Promotion of Bulk Drug Parks proposes to provide grants-in-aid to three Bulk Drug Parks with a maximum limit of Rs. 1000 Crore per Bulk Drug Park or 70% of the project cost of Common Infrastructure Facilities. In the case of hilly states and the North East Region, the grant-in-aid will be Rs.1000 Crore per Bulk Drug Park or 90% of the project cost of Common Infrastructure Facilities. Note: Grant-in-Aid from the Government of India will not be utilized towards land and building components of the project.

Scope and Coverage

Assistance provided under the proposed Scheme will be admissible for the creation of Common Infrastructure Facilities by State Governments in Bulk Drug Parks.

Indicated Common Infrastructure Facilities

The assistance under the proposed scheme will be admissible for the creation of Common Infrastructure Facilities such as:

• Solvent Recovery and Distillation Plant
• Central Effluent Treatment Plants and Captive Power Plants
• Steam and Cooling systems
• Incubation and Common Logistic facilities
• Advance Common Testing Centre
• Regulatory awareness facility Centre and Emergency Response Centre

Incentive Outlay Details

The incentive outlay is Rs. 3,000 Crore for granting financial assistance for construction of Common Infrastructure Facilities in three Bulk Drug Parks with a maximum limit of Rs. 1,000.

Tenure of the Scheme

The Scheme on Promotion of Bulk Drug Parks shall be open during the period 2020-2021 to 2024-2025.

Implementation of the Scheme

The Scheme on Promotion of Bulk Drug Parks would be implemented through a one-time grant-in-aid to be released in various phases for the creation of Common Infrastructure Facilities in Bulk Drug Park to a State Implementing Agency (SIA). The Scheme Steering Committee (SSC) in the Department of Pharmaceuticals (DoP) will approve the project components and funding therewith depending upon the merits of the proposal.

Production Linked Incentive (PLI) Scheme

To upscale the manufacturing of pharmaceutical products to meet any emergency like COVID 19, the Government has launched the Production Linked Incentive (PLI) Scheme. As part of this scheme, incentives will be provided to the pharmaceutical industry to ensure drug security in the country.

The objective of the PLI Scheme

The primary objective of the Production Linked Incentive (PLI) Scheme is to boost domestic manufacturing of Key Starting Materials (KSM), Drug Intermediates, and Active Pharmaceutical Ingredients (APIs).

• To promote the pharmaceutical industry by increasing the large investments in the sector
• To ensure the availability of drugs at affordable prices and sustainable domestic supply
• To reduce India’s import dependence on other countries for raw materials for the manufacturing of Pharmaceutical products

Financial Incentive Validity Details

Under the Production Linked Incentive (PLI) Scheme, the financial incentive will be provided for eligible manufacturers who synthesize fermentation-based products or chemically synthesize products. The fermentation-based products manufacture will get the incentive for six years while the manufacturers who produce chemically synthesize products will get the benefit five years.

Quantum of Incentive

As mentioned above, the incentive under the Production Linked Incentive (PLI) Scheme is different for manufactures of fermentation-based products and chemically synthesizes products, and the assistance is provided based on the incremental sale of Key Starting Materials (KSM), Drug Intermediates and Active Pharmaceutical Ingredients (APIs). A total outlay of Rs.6940 crore will be granted as an incentive during the tenure of the scheme. The incentive for Fermentation Based Products

Sl.No	Duration		Quantum of Incentive
1	First Four Years	2022 -2023 to 2025-2026	20%
2	Fifth Year	20206 to 2027	15%
3	Sixth Year	2027 to 2028	5 %

The incentive for chemically synthesizes products

Sl.No	Duration		Quantum of Incentive
1	Five Years	2022 -2023 to 2025-2026	20%

 Applicable Products

The Production Linked Incentive (PLI) Scheme is applicable for target segments of Key Starting Materials (KSM), Drug Intermediates, and Active Pharmaceutical Ingredients (APIs). For more details, kindly find the attachment.

Eligibility Criteria

The support under the PLI scheme is offered to manufactures of critical KSM / Drug intermediates and API.

• Eligibility for the PLI scheme will be subject to the threshold of incremental investment for manufacture of critical KSMs/Drug Intermediates and APIs
• Eligibility under the PLI scheme will not affect the eligibility of any other scheme and vice-versa
• The PLI scheme is applicable only for the Greenfield projects

Note: The financial year 2019 to 2020 will be considered as the base year for the calculation of incremental sales of critical KSMs, Drug Intermediated and APIs. A list of identified KSMs/APIs is attached here for reference. The manufacture of such products can get financial assistance under the scheme.

PLI Scheme Tenure Details

The tenure of the Production Linked Incentive (PLI) is for eight years from 2020-2021 to 2027-2028.

PLI Scheme Application Procedure

The company registered in India which full fill the eligibility criteria as mentioned above can apply for the Schemes to Promote Drug Manufacturing

• An application, complete in all aspects needs to be submitted before the due date and an acknowledgement will issue after the initial scrutiny of the application.
• The eligible applicants will be appraised on an ongoing basis and considered for approval.
• The incentive will be released to eligible applicants, meeting the required thresholds and whose disbursement claims are found to be in order.
• To know more about the Schemes to Promote Drug Manufacturing, access the official website of Department of Pharmaceutical.