DoP Data Reveals Pharma PLI Witnessed INR 28,328 Cr Investment till April 2024

According to data from the Department of Pharmaceuticals (DoP), the industry has invested around INR 28,328 Cr, marking a substantial increase from INR 18,618.09 Cr in March 2023.

The Production Linked Incentive (PLI) Scheme for Pharmaceuticals reported significant progress, with 261 manufacturing locations commissioned by the end of April 2024. 

According to data from the Department of Pharmaceuticals (DoP), the industry has invested around INR 28,328 Cr, marking a substantial increase from INR 18,618.09 Cr in March 2023.

The PLI Scheme for Pharmaceuticals, launched in 2021, was designed with a financial outlay of INR 15,000 Cr. 

It is set to run from FY 2020-21 to FY 28-29, aiming to provide financial incentives to 55 selected applicants, including 20 micro, small, and medium enterprises (MSMEs). 

The scheme focuses on manufacturing identified products under three categories for a period of six years.

Notable Investment & Production Milestones

Until April 2024, the scheme had attracted 278 applications across four rounds, with 55 approved for assistance. 

The actual production under the scheme reached approximately INR 1,43,553 Cr, generating employment for 59,768 people, as revealed by the DoP.

The PLI Scheme for Bulk Drugs also showed positive growth, with investments increasing by INR 1,310 Cr from INR 2,405.09 Cr in March 2023 to INR 3,715 Cr by April 2024. 

The scheme resulted in the actual production of about INR 968 Cr and employed 2,994 individuals. Out of 48 approved applications, 30 projects had been commissioned by the end of April.

Launched in 2020, the PLI Scheme for Bulk Drugs aims to promote domestic manufacturing of critical import-dependent bulk drugs, including key starting materials (KSMs), drug intermediates, and active pharmaceutical ingredients (APIs). 

Additionally, the scheme supports establishing greenfield plants in four target segments—two based on fermentation and two on chemical synthesis.

Government Initiatives & Financial Allocations

The government committed a total outlay of INR 6,940 Cr for the scheme, covering the period from 2020-21 to 2029-30. The incentive structure provides a 20% incentive for the first four years, 15% for the fifth year, and 5% for the sixth year on eligible sales of fermentation-based bulk drugs. Furthermore, for chemical bulk synthesis-based medicines, a 10% incentive is given for six years on eligible sales.

In March 2024, the government inaugurated 27 Greenfield Bulk Drug Park projects, announcing that India would soon produce penicillin G domestically after a 30-year gap. 

The DoP highlighted that these projects receive support through regulatory streamlining and handholding across various government departments.

Budgetary Highlights & Future Expectations

The Interim Union Budget 2024-25, presented by the Finance Minister Nirmala Sitharaman on February 1, 2024, revealed that expenditure on the PLI Scheme for Pharmaceuticals exceeded initial allocations. The FY 2023-24 spending was INR 1,632 Cr, compared to a budget estimate (BE) of INR 1,000 Cr. 

However, the expenditure for the PLI Scheme for Bulk Drugs and domestic manufacturing of medical devices was notably lower, with INR 16.13 Cr and INR 48.16 Cr spent, respectively, against a BE of INR 100 Cr each.

For FY 2024-25, the interim budget allocated INR 2,143 Cr to PLI Schemes out of a total DoP outlay of INR 4,089.95 Cr. This represents a significant increase from the INR 1,200 Cr allocated in the previous fiscal year.

The Department of Pharmaceuticals continues to support and facilitate the progress of the PLI Schemes, aiming to bolster India's pharmaceutical manufacturing capabilities and reduce dependence on imports for critical bulk drugs.