PLI Scheme: Critical Bulk Drugs approved

The Ministry of Chemical and Fertilizers recently approved sixteen applicants under Production Linked Incentive scheme. The approvals will promote domestic manufacturing of drug intermediates and Active Pharmaceutical Ingredients in the country.

What is the plan?

The approved applicants will set up pharmaceutical manufacturing plants in the country. They will invest around Rs 348 crores in establishing these units. These plants are expected to create employment for more than 3,042 people. The operation of these plants is expected to commence from April 2023.

Significance

The Indian Pharmaceutical industry is the third largest in the world. The markets for Indian pharmaceuticals are good in advanced economies such as European Union and the United States. Also, the Indian Pharmaceutical industry is well known for producing affordable medicines.

The only issue is that the Indian pharmaceutical industry is heavily dependent on foreign countries, especially China, for its Active Pharmaceutical Ingredients. The launch of these sixteen plants will reduce dependence of India over foreign countries.

Active Pharmaceutical Ingredients

The Active Pharmaceutical Ingredients are the same as that of the bulk drugs. India was actually self- reliant in API in 1990s. However, with cheaper products China captured the Indian pharmaceutical markets in foreign countries. China created an unbeatable low-cost API manufacturing industry. This was mainly through tax incentives and aggressive government funding. The cost of operation of Chinese Pharmaceutical companies is one-fourth the Indian cost!

Thus, it is important for India to push in more funds in the pharmaceutical industry and recapture the lost markets.

COVID-19 lessons

In 2018-19, GoI imported 2.4 billion USD worth API from China. However, due to COVID-19, India was force to stop these imports. This affected the Indian Pharmaceutical companies very badly. Therefore, Government of India is now implementing alternative route of domestic production of APIs.

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