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Panel asks DoP to boost domestic manufacturing of all products under PLI scheme for bulk drugs
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Gireesh Babu, New Delhi
April 10 , 2026
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Observing that production of several bulk drugs from the targeted products under the production linked incentive (PLI) scheme for bulk drugs are yet to commence, the Parliamentary Panel on Chemicals and Fertilisers has recommended to the Department of Pharmaceuticals (DoP) to intensify its efforts to boost domestic manufacturing of these products.
The Department-related Parliamentary Standing Committee on Chemicals and Fertilisers, while considering the Demand for Grants of the DoP for the financial year 2026-27, noted that the fund utilisation under the PLI scheme for promotion of domestic manufacturing of critical key starting materials (KSMs)/drug intermediates (DIs) and active pharmaceutical ingredients (APIs) is lower compared to the budget allocation in the previous years.
"Given that the scheme will remain operational until FY 2029-30, the Committee recommend that the Department may intensify efforts to ensure boosting of domestic manufacturing of the remaining products under the Scheme," said the Panel headed by Member of Parliament Kirti Azad Jha.
In connection with the extent to which the scheme has been able to reduce dependence on a single source for production of critical drugs and boost domestic manufacturing of identified KSMs etc., the Panel was informed that out of the 41 identified products, 33 have been subscribed. Among these, production has commenced for 17 products and manufacturing capacity has been established for 11 additional products. Thus, capacity creation has been completed for 28 notified products.
Domestic manufacturing capacity of approximately 56,800 MT per annum has been developed for these 28 critical products. The scheme has resulted in cumulative sales of Rs 2,720 crore reported till December 2025, including exports of Rs 527.96 crore, thereby avoiding imports worth Rs 2,192.04 crore.
The Panel noted that eight out of the 41 identified products are yet to be subscribed and production has commenced only for 17 out of the 41 targeted products, indicating that the intended level of domestic manufacturing is yet to be fully realized.
The Scheme, with a financial outlay of Rs 6,940 crore, was approved by the Government of India on March 20, 2020, in order to avoid disruption in supply of critical APIs by reducing excessing dependence on a single source.
The Panel observed that out of the total outlay, an amount of Rs 54.83 crore has been utilized to release incentive claims to the eligible applicants till December, 2025.
It noted that the Budget Estimate (BE) for the year 2023-24 for the Scheme was Rs 100 crore which was reduced to only Rs 16.13 crore at Revised Estimate (RE) stage, and the expenditure was Rs 11.66 crore.
For the year 2024-25, the BE allocation was Rs 58 crore, reduced to Rs 22 crore at RE stage and actual expenditure was Rs 21.30 crore.
The DoP submitted that incentives are sales-linked and disbursed only after completion of committed investment, establishment of annual production capacity and achievement of eligible sales as per the provisions of the Scheme Guidelines.
The Panel also observed that in FY 2025-26, a little improvement was shown in fund utilisation where RE has increased from Rs 40 crore to Rs 52.86 crore and Rs 23.41 crore was utilized, as on February 20, 2026. Supportive measures and interventions such as expedited environmental clearances, coordination with State drug regulators, enhanced incentive rates for fermentation-based products and quarterly incentive cycles etc. as outlined by the Department to ensure optimal utilization of allocated funds under the Scheme.
"In view of the allocation of an amount of Rs 66.40 crore for BE 2026–27 for the Scheme, the Committee recommend that the Department may ensure that the supportive measures/interventions translate into quantifiable improvement in fund utilization," said the Panel.
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