The Union Minister for Chemicals and Fertilizers DV Sadananda Gowda has launched four schemes of Department of Pharmaceuticals for promotion of domestic manufacturing of bulk drugs and medical devices parks in the country. 

 

Speaking on the occasion, Gowda said that this is in line with the vision of Prime Minister Narendra Modi, and his clarion call for making India Atma Nirbhar in the pharma sector. For this the Government of India has approved four schemes, two each for Bulk Drugs and Medical Devices parks. 

 

Gowda said it is a matter of concern that our country is critically dependent on imports for basic raw materials, viz. Bulk Drugs (Key Starting Materials (KSMs)/Drug Intermediates (DIs) and Active Pharmaceutical Ingredients (APIs)) that are used to produce some of the essential medicines. Similarly, in the medical devices sector, our country is dependent on imports for 86% of its requirements of medical devices. 

 

Giving details of the guidelines, Mandaviya said that the Production Linked Incentive (PLI) schemes for promoting domestic manufacturing of KSMs, DIs and APIs and medical devices will go a long way including to boost domestic manufacturing of 53 bulk drugs on which India is critically dependent on imports. 

 

The list of 41 products contained in the scheme guidelines will enable domestic production of 53 bulk drugs. Financial incentives will be given to a maximum of 136 manufacturers selected under the scheme as a fixed percentage of their domestic sales of these 41 products manufactured locally with required level of domestic value addition. 

 

The incentives would be given for a period of 6 years. In case of fermentation based products, the rate of incentive is 20% for the first four years, 15% for the fifth year and 5% for the sixth year.

 

In case of chemically synthesised products, the rate of incentive is 10% for all six years. The selected manufacturers shall have to complete committed investment above a threshold investment mandated for each product and achieve a prescribed minimum installed capacity before they are eligible to receive incentives. 

 

Threshold investment is Rs. 400 crore for four fermentation based products and Rs. 50 crore for ten fermentation based products. Similarly, threshold investment is Rs. 50 crore for four chemically synthesised products and Rs. 20 crore for 23 chemically synthesised products. 

 

The incentives for fermentation based products would be available from FY 2023-24 i.e. after a two year gestation period during which the selected applicant has to complete the committed investment and install the committed capacity. 

 

For chemically synthesised products the incentives would be available from FY 2022-23 i.e. after a gestation period of one year during which the selected applicant has to make the committed investment and install the committed capacity. Any company, partnership firm, proprietorship firm or a LLP registered in India and possessing a minimum net worth (including group companies) of 30% of proposed investment is eligible to apply for incentives under the scheme. 

 

The applicants will be selected on the basis of a transparent composite evaluation criteria which include the annual production capacity committed by the applicant and the sale price of the product quoted by the applicant. Applicants quoting low sale price and higher production capacity will get higher marks in the evaluation.

 

The scheme is open for applications for a period of 120 days from the date of issuance of guidelines and the approval will be given to the selected applicants within 90 days from the closure of the application window. Applications will be received only through an online portal. The total financial outlay of the scheme is Rs. 6,940 crore.

 

Scheme for promotion of Bulk Drug Parks: The scheme envisages creation of 3 bulk drug parks in the country. The grant-in-aid will be 90% of the project cost in case of North-East and hilly states and 70% in case of other states. Maximum grant-in-aid for one bulk drug park is limited to Rs. 1,000 crore. 

 

States will be selected through a challenge method. The states interested in setting up the parks will have to ensure assured 24*7 supply of electricity and water to the bulk drug units located in the park and offer competitive land lease rates to bulk drug units in the park. 

 

The states have to submit their proposal within 60 days of the date of issuance of the guidelines. Selection will be done and in-principle approval will be given to three selected states within 30 days of the last date of submission of proposals.

 

Thereafter, the 3 selected States will have to submit a Detailed Project Report (DPR) within 180 days of the in-principle approval based on which final approval will be given. The total financial outlay of the scheme is Rs. 3,000 crore.

 

CEO NITI Ayog, Amitabh Kant said "India produces a huge number of generic medicines as well as more than 500 API, still it has to import large quantities of API. The Prime Minister wants to reduce dependency on imports."