Scheme for Pharmaceuticals Manufacturing

Production Linked Incentive 2.0 (PLI 2.0)

Best opportunity for MSME to apply for this scheme before 31st July, 2021

As notified on 03 March 2021

Overview

The objective of the scheme is to enhance India’s manufacturing capabilities by increasing investment and production in the sector and contributing to product diversification to high-value goods in the pharmaceutical sector. One of the further objectives of the scheme is to create global champions out of India who have the potential to grow in size and scale using cutting-edge technology and thereby penetrate the global value chains.

Salient Features of the Scheme

Target Groups 

The manufacturers of pharmaceutical goods registered in India will be grouped based on their Global Manufacturing Revenue (GMR) to ensure wider applicability of the scheme across the pharmaceutical industry and at the same time meet the objectives of the scheme. The qualifying criteria for the three groups of applicants will be as follows:

• Group A: Applicants having Global Manufacturing Revenue (FY 2019-20) of pharmaceutical goods more than or equal to INR 5,000 cr.
• Group B: Applicants having Global Manufacturing Revenue (FY 2019-20) of pharmaceutical goods between INR 500 (inclusive) cr and INR 5,000 cr.
• Group C: Applicants having Global Manufacturing Revenue (FY 2019-20) of pharmaceutical goods less than INR 500 cr. Within this group, a sub-group for MSME industry will be made given their specific challenges and circumstances.

Tenure of the Scheme

The duration of the scheme will be from FY20 – FY28. This will include period for processing of applications (FY20), optional gestation period of 1 yr (FY21), incentive for 6 yrs and FY28 for disbursal of incentive for sales of FY27

Base Year of the Scheme

Base year of the scheme is FY19

Target Segments

The scheme shall cover pharmaceutical goods under three categories as mentioned below:

1. Category 1: Bio-pharmaceuticals, Complex generic drugs, Patented drugs or drugs nearing patent expiry
2. Category 2: Active Pharmaceutical Ingredients / Key Starting materials / Drug Intermediates
3. Category 3: (Drugs not covered under Category 1 and Category 2):
   • Repurposed drugs
   • Autoimmune drugs, anti-cancer drugs, anti-diabetic drugs, anti-infective drugs, cardiovascular drugs, psychotropic drugs and anti-retroviral drugs
   • In-vitro diagnostic devices
   • Other drugs as approved
   • Other drugs not manufactured in India

Incentives

Rate of Incentive: 

• The rate of incentive on incremental sales (over base year) of pharmaceutical goods covered under Category 1 and 2 will be 10% for FY 2022-23 to FY 2025-26, 8% for 2026-27 and 6% for 2027-28.
• The rate of incentive on incremental sales (over base year) of pharmaceutical goods covered under Category-3 will be 5% for FY 2022-23 to FY 2025-26, 4% for 2026-27 and 3% for 2027-28.

Eligibility

Eligibility for selection

• The applicants will be selected based on pre-defined objective criteria to assess their experience, capacity to grow in scale and innovate. The selection criteria shall be elaborated in the scheme guidelines.

Eligibility for incentive

• The selected participants in the scheme will be eligible for incentives on incremental sales of pharmaceutical goods based on yearly threshold criteria of minimum cumulative investment and minimum percentage growth in sales.