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DoP appoints IFCI as PMA to implement PLI scheme to promote domestic manufacturing of key APIs & medical devices
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Laxmi Yadav, Mumbai
August 17 , 2020
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The Department of Pharmaceuticals (DoP) has selected IFCI Ltd (the erstwhile Industrial Finance Corporation of India Ltd), a non-banking finance company in the public sector, as the project management agency (PMA) for smooth implementation of the production linked incentive (PLI) scheme for promotion of domestic manufacturing of critical key starting materials (KSMs)/drug intermediates (DIs)/active pharmaceutical ingredients (APIs) as well as medical devices.
IFCI Ltd has created web portals and email IDs for each of the PLI Schemes. It has unveiled web portal http://plibulkdrugs.ifciltd.com for implementation of PLI Scheme for promotion of domestic manufacturing of critical KSM/Drug Intermediates and APIs.
For execution of PLI Scheme for promotion of domestic manufacturing of medical devices, it has launched another web portal plimedicaldevices.ifciltd.com.
The web portals contain relevant information about the Schemes, application forms and contact details, in case of any query of the applicant. The application needs to be submitted through an online portal maintained by the PMA within four months from July 27, 2020, the date of issuance of guidelines for implementation of PLI Scheme for bulk drugs and medical devices.
IFCI Ltd will be responsible for appraisal of applications and verification of eligibility; examination of claims eligible for disbursement of incentive; compilation of data regarding progress and performance of the scheme including threshold investment and sales of manufactured goods of applicants selected under the scheme. The PMA will have the right to carry out physical inspection of an applicant's manufacturing units and offices through site visit.
An Empowered Committee (EC) chaired by CEO, NITI Aayog will consider applications, as found eligible by the PMA, for approval under the scheme. After receiving approval from the EC, the PMA will issue a letter to the selected applicant within 5 working days. The approval letter will clearly mention the name of applicant, target segment, eligible product(s), proposed investment, baseline (if applicable), scheduled date of commencement of production, ceiling of annual incentive, yearly threshold of cumulative investment and incremental sales of manufactured goods applicable for determining eligibility for incentive.
PLI scheme which is applicable only for greenfield projects intends to boost domestic manufacturing of identified KSMs, DIs and APIs by attracting large investments in the sector and thereby reducing India’s import dependence in critical APIs. Under the scheme, financial incentives shall be given for six years based on sales made by selected manufacturers for 41 products which cover all the identified 53 APIs. The tenure of the scheme is from FY 2020-21 to FY 2029-30.
For fermentation based products including penicillin G, 7-ACA, erythromycin thiocynate, clavulanic acid, neomycin, gentamycin, betamethasone, dexamethasone, prednisolone, rifampicin, vitamin B1, clindamycin base, streptomycin, tetracycline, incentive for FY 2023-24 to FY 2026-27 would be 20%, incentive for 2027-28 would be 15% and incentive for 2028-29 would be 5%. The investment threshold limit for fermentation based products ranges from Rs. 50 crore to Rs. 400 crore.
For chemical synthesis based products-- cyclohexane diacetic acid (CDA), 2-methyl-5 nitro-Imidazole (2-MNI), dicyandiamide (DCDA), para amino phenol, meropenem, atorvastatin, olmesartan, valsartan, losartan, levofloxacin, sulfadiazine, ciprofloxacin, ofloxacin, norfloxacin, artesunate, telmisartan, aspirin, diclofenac sodium, levetiracetam, carbidopa, ritonavir, lopinavir, acyclovir, carbamazepine, oxcarbazepine, vitamin B6, levodopa, incentive for FY 2022-23 to FY 2027-28 would be 10%.
The investment threshold limit for chemical synthesis based products ranges from Rs. 20 crore to Rs. 50 crore. Manufacturers of critical KSMs/DIs and APIs registered in India can apply for the scheme.
The PLI Scheme for promoting domestic manufacturing of medical devices aims to provide financial incentive to boost domestic manufacturing and attract large investments in the medical device sector. Currently the medical device industry depends on imports up to an extent of 86%. Domestic manufacturing is limited to surgical, cardiac stents and general medical devices and consumables.
The Scheme targets four categories of medical devices viz. 1) cancer care/radiotherapy medical devices, 2) radiology & imaging medical devices (both ionizing & non-ionizing radiation products) and nuclear imaging devices, 3) anaesthetics & cardio-respiratory medical devices including catheters of cardio respiratory category & renal care medical devices, 4) AU Implants including implantable electronic devices.
The tenure of the Scheme is from financial year 2020-21 to financial year 2026-27. It is applicable for greenfield projects. The companies registered in India and having net worth (of applicant company including that of group companies) not less than Rs. 18 crore (i.e. 30% of the threshold investment for the first year) as on the date of application are qualified to apply under the Scheme.
A maximum of 28 applicants shall be selected under the Scheme. A maximum of 10 applicants shall be selected under each target segment. A minimum of 3 applicants, if available, shall be selected under each target segment. Expenditure incurred on the new plant, machinery and equipment shall be considered as investment for determining eligibility under the scheme.
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