With an eye on reducing the dependence of raw material import from China, the department of pharmaceuticals is finalising guidelines for the production linked incentive (PLI) scheme approved in March for encouraging domestic drug-makers to produce active pharmaceutical ingredients (APIs) and other raw materials for medicine in India, Minister of Chemicals & Fertilisers DV Sadananda Gowda said on Monday.
The guidelines for PLI scheme will form the basis for objectively selecting locations of upcoming three bulk drugs parks and four medical devices parks in the country, Gowda said as per a government release after a meeting.
On Monday, Punjab finance minister Manpreet Singh Badal met Gowda to hand over a letter requesting the Centre to consider setting up of one of the proposed bulk drug park in Bhatinda.
Badal said that the location at Bhatinda has good connectivity, water and land availability, and the state also has presence of some large pharmaceutical facilities, as per the release.
The Union Cabinet had in March approved the PLI scheme, with financial implications of ₹6,940 crore for next eight years, wherein financial incentive will be given to eligible manufacturers of 53 critical bulk drugs.
The rate of incentive will be 20 % of incremental sales value for fermentation-based bulk drugs like erythromycin and 10% for chemical synthesis based bulk drugs like paracetamol. The incentive on their incremental sales will be for a period of 6 years over the base year of 2019-20.
Besides the incentive, the Centre in partnership with states would also develop 3 mega bulk drug parks, which would designated areas will have common facilities such as solvent recovery plant, distillation plant, power & steam units, common effluent treatment plant, among others. As part of the scheme, the Centre plans to aid states to the tune ₹1000 Crore per bulk drug park.
The Central government expects the scheme for promotion of bulk drug park to result in incremental production of bulk drugs worth about ₹46,400 crore, as well as lead to significant generation of jobs.
Apart from employment generation, the government also aims to reduce India’s dependence on import of APIs and key starting materials from China. In 2018-19, Indian pharmaceutical firms imported roughly was about two-third of the country’s need.
Focus on reducing dependence on China has become even more urgent after the covid-19 pandemic had brought the raw material supplies to a halt in March, leading to concern of widespread shortage of medicines in India and globally.
The concern was further exacerbated by escalation of tension between India and China on the border last month, following which shipments of APIs were temporarily halted at ports.