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Governance Structure: Manufacturing Active Pharmaceutical Ingredients in India

Governance Structure: Manufacturing Active Pharmaceutical Ingredients in India

The Government introduced this scheme to reduce India’s dependence on China and other foreign countries. It supports the labour-intensive sectors and aims to increase the employment ratio in India.This scheme works to reduce down the import bills and boost up domestic production.

In the year 2022, various programs and initiatives were implemented in the Department of Pharmaceuticals. Major achievements of the Department this year include schemes like ‘Pradhan Mantri Bhartiya Janaushadhi Pariyojana’ to provide quality generic medicines at affordable prices to the poor and underprivileged and PLI scheme to strengthen India’s manufacturing capacity in the pharmaceutical sector by increasing investment and production. Apart from this, the department also laid special emphasis on promoting domestic manufacturing of medical equipment and strengthening the pharmaceutical industry

 Government industrial policy

  • Common Infrastructure Facilities (CIF) with a maximum limit of Rs.1000 crore per park or 70% of the project cost of CIF, whichever is less.
  • In case of North Eastern States and Hilly States (Himachal Pradesh, Uttarakhand, Union Territory of Jammu & Kashmir and Union Territory of Ladakh) financial assistance would be 90% of the project cost.
  •  The total size of the Scheme is Rs. 3000 crore and the tenure of the Scheme will be five years (2020-21 to 2024-25).
  • The detailed guidelines of the above-mentioned schemes are available on the website (http://pharmaceuticals.gov.in) of the Department of Pharmaceuticals.

Governmental organization involved

 Central Public Section undertakings-the Department has 5 Central Public Section undertakings under its Administrative control, they are

(a) Indian Drugs & Pharmaceuticals Ltd. (IDPL), Dundahera Industrial Complex, Dundahera, Gurgaon, Haryana,

(b) Hindustan Antibiotics Ltd, Pimpri, Pune, Maharashtra,

 (c) Karnataka Antibiotics & Pharmaceuticals Limited, Bangalore-560010,

(d) Bengal Chemicals & Pharmaceuticals Ltd, Kolkata, West Bengal and

(e) Rajasthan Drugs and Pharmaceuticals Limited, Road NO.12, V.K.I. Area, Jaipur-302013

As per the guidelines dated 29.10.2020 for the Production Linked Incentive (PLI) Scheme for Promotion of Domestic Manufacturing of critical Key Starting Materials (KSMs)/Drug Intermediates(DI) and Active Pharmaceuticals Ingredients (APIs) in the Country, applications were invited under the Scheme under three rounds.

 Subsequent to the decision in Empowered Committee (EC) meeting on 03 .06.2022, actions are to be taken to invite application for the eligible product Vitamin B 1, through chemical synthesis route.

As per the decision taken, the 10% incentive rate shall be applicable as applicable for APIs produced through Chemical Synthesis and the Incentive ceiling for vitamin B 1 will remain the same as per original guidelines.

 In this regard, the necessary modifications in the existing guidelines for the product Vitamin-Bi

Process to follow

  • Application under the Scheme can be made by any manufacturer registered in India.
  • An application, complete in all aspects, will have to be submitted before the due date. Acknowledgment will be issued after initial scrutiny of the application.
  • The applicants will be appraised and considered for approval, based on predefined selection criteria.
  • The incentives shall be released to the selected participants under the scheme who meet the annual threshold criteria of minimum cumulative investment and minimum growth in sales and if disbursement claims are found to be in order.
  • Timely disbursal of incentives by the project Management Agency will be monitored by DoP and reviewed by the EGoS.
  • The incentive will be disbursed on incremental sales for a maximum period of 6 years for each participant.
  • The progress in approval of applications and disbursal of incentive shall be monitored on an ongoing basis against the monitoring framework to be specified in the guidelines.


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.

For a further, comprehensive list of eligibility criteria, please click here.

The government aims to make India an integral part of the global supply chain and enhance exports. India, being the second-largest producer of steel in the world, introducing it under the PLI scheme will benefit the country as it may expand export opportunities.

Kaushal Sharma

Kaushal Sharma is a Research Intern at Tatvita-Analysts. He is pursuing Masters in Economics from Symbiosis College.

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