The pharmaceutical industry in India is a rapidly growing sector that plays a crucial role in providing essential medicines to the population. The Indian government recognizes the significance of this sector and has introduced several subsidies and schemes to support the growth and development of the pharmaceutical industry. These subsidies cover a wide range of activities such as technology upgradation, promotion of bulk drug parks, production linked incentives, and training and knowledge improvement programs. The eligibility criteria, benefits, and application process vary for each subsidy.
Some subsidies are available to registered manufacturers, while others are open to industry associations, government agencies, and non-government organizations. The subsidies aim to enhance the competitiveness of the pharmaceutical sector, improve the quality of medicines, and reduce dependence on imports for critical APIs.
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Subsidies and Scheme in Pharmaceutical Industry
| Subsidy Name | Benefits | Eligibility | How to Apply |
| APICF | Covers 70% of the approved project cost or Rs 20 crore, whichever is less (90% of the project cost or Rs 20 crore for Himalayan States and North East Region) – Expected benefits: standardization, improved quality standards, better regulatory compliance, reduced wastage, increased personnel availability, increased competitiveness | – Pharmaceutical manufacturing units in a cluster forming a Special Purpose Vehicle (SPV) with at least 5 members. SPV must be a separate legal entity, with pharma companies holding at least 51% equity, Members should have a net worth meeting the requirements. | Submit a complete project proposal in the prescribed format.The proposal will be scrutinized by the PMC and submitted to the SSC for approval. |
| Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS) | Up to 5% per annum interest subvention (6% for SC/ST-owned units) on eligible loan components up to Rs. 10 crore for a maximum period of 3 years on a reducing balance, or 10% credit-linked capital subsidy on eligible loan components with a maximum limit of Rs. 10 crore | – Micro, small, and medium pharma enterprises with a proven track record, Aiming to upgrade their technology to meet WHO-GMP or Schedule M standards | – Apply in the prescribed format through the online portal set up by the PMC. Applications accepted on a rolling basis until 29th February 2024, subject to the availability of the budget. |
| PMPDS | Financial assistance for various activities, such as organizing seminars, conferences, workshops, exhibitions, and creating databases and IT-enabled systems , Aims to promote growth and development of the pharmaceutical and medical devices industry | – Recognized industry associations, organizations or firms with a track record in conducting studies or surveys in pharmaceuticals and medical devices – Government or quasi-government agencies with relevant experience | – Apply at least 60 days before the proposed event through an online portal. The application will be scrutinized by the PMC, which will submit its recommendation to the SSC for approval and release of the grant by the Department of Pharmaceuticals |
| PLI Scheme for Pharmaceuticals | Enhance manufacturing capabilities. Contribute to product diversification. Create global champions with cutting-edge technology | 1. Registered manufacturers in India 2. Grouped based on Global Manufacturing Revenue (GMR) for FY 2019-20 (Group A, B, C) | Apply as a registered manufacturer.Submit a fully completed application before the deadline. Approval based on predefined selection criteria |
| PLI Scheme for KSMs, DIs, and APIs | Financial incentives based on sales of 41 identified products for 6 years to boost domestic manufacturing and reduce import dependence on critical APIs. | Registered manufacturers in India meeting threshold investment criteria in greenfield projects. | Apply within 120-day application window by submitting a complete initial application. |
| Scheme for Promotion of Bulk Drug Parks | 1. Financial assistance for common infrastructure facilities in three Bulk Drug Parks. 2. Encourages setting up of bulk drug parks to increase competitiveness. 3. Helps industry meet environmental standards at reduced costs. | 1. Bulk Drug Park projects proposed by State Governments. 2. A State Implementing Agency (SIA) established by the relevant state government. | State Governments propose Bulk Drug Park projects, and proposals are reviewed and approved by the Scheme Steering Committee (SSC) constituted by the Department of Pharmaceuticals (DoP). |
| Promotion of Medical Device Parks Scheme | Easy access to standard testing and infrastructure facilities. Increased competitiveness due to the creation of world-class common infrastructure facilities. A substantial decrease in the cost of producing medical devices, leading to improved accessibility and affordability of these devices in the domestic market. This also results in the optimization of resources and economies of scale. | Medical Device Parks that are proposed by State Governments and chosen under the program. Projects implemented by a State Implementing Agency (SIA), a legal entity set up by the concerned State government | The detailed guidelines of the scheme will be uploaded on the website of the Department of Pharmaceuticals (DoP). Applications submitted under the scheme will receive approval from the Scheme Steering Committee (SSC) established by the Department of Pharmaceuticals. |
| Production Linked Incentive Scheme for Medical Devices | Boost domestic manufacturing and attract investments | Engaged in manufacturing goods in target segments, meet investment and incremental sales thresholds, greenfield projects only | Submit complete application within 120-day window, eligible applications appraised and selected, incentives disbursed to selected applicants |
| PMBJP | Affordable, quality medicines & surgical items; promotes generic medicines; employment opportunities; incentives up to INR 5 lakh | Entrepreneurs, women, Divyang, SC, ST, aspirational districts, North-Eastern States; WHO-GMP certified suppliers; NABL-accredited lab tests | Open a PMBJP Kendra, link with PMBI, incentives based on purchases from PMBI; additional incentives for specified areas/categories |
| A Central Sector Scheme for Consumer Awareness, Publicity, and Price Monitoring. | Monitoring medicine prices and availability; Analyzing market data; Collecting test samples; Conducting training and workshops; Collaborating with stakeholders | State and Union Territory governments in India, categorized by population: Category I (>3%), Category II (1-3%), Category III (<1%) | Provide required office space for PMRU; Expenses met under the scheme; Additional expenditure borne by State/UT; Project staff recruited through outsourcing agency on a contract basis |
| Pharmaceutical Promotion and Development Scheme (PPDS) | Financial support for activities promoting growth in the pharmaceutical sector. Support for training, events, research studies, materials, awards, publicity, etc. | Institutions, organizations, voluntary organizations, or non-government organizations. Government/academic bodies, national/state-level industry associations. | Submit a proposal or application to the Department of Pharmaceuticals for consideration. |
| Training/knowledge improvement programs/activities | Conduct training/knowledge improvement programs/activities on relevant subjects for the growth of the pharmaceutical industry. Organize summits, conventions, exhibitions, pharmacy weeks, meetings, etc., in India and abroad, and produce promotional materials like films and displays. | The target group of participants must be from pharmaceuticals, medical devices, and related sectors. | Apply for financial support based on the organization type and level of support needed. Submit required information/documents for grant release, such as event date confirmation, disclosure of funding sources, and confirmation that no Utilization Certificate is pending from previous grants. |
Scheme for Strengthening of Pharmaceuticals Industry (SPI)
Subsidy Name: Support for Cluster Infrastructure in Pharmaceutical Industry (SCIP)
Eligibility Criteria: This subsidy targets pharmaceutical manufacturing units in a cluster that establish a Special Purpose Vehicle (SPV) with a minimum of 5 members. The SPV must be an independent legal entity and can include pharma clusters supported by state governments. Representatives from cluster members, financial institutions, government, and R&D organizations should be included in the SPV. Pharmaceutical companies must own at least 51% equity in the SPV, and members should possess a net worth that satisfies the criteria.
Benefits: The subsidy will fund 70% of the sanctioned project cost or Rs 20 crore, whichever is lower. For Himalayan States and the North East Region, the grant will be Rs. 20 Crore per Cluster or 90% of the project cost, whichever is lower.
Application Process: Candidates must submit a comprehensive project proposal in the specified format, containing details such as a business strategy, final forecasts, financial feasibility report, identification of obstacles, and an action plan for boosting competitiveness. The project proposal should include technical recommendations from a qualified authority. The Project Management Consultant (PMC) will examine the proposal and submit it to the Scheme Steering Committee (SSC) for approval.
Funds will be disbursed based on the assessment by the PMC and authorization by the SSC in installments. The SPV will be accountable for the maintenance and ownership of assets created under the program.
Anticipated benefits of the program include the standardization of manufactured APIs/formulations, enhanced quality standards, improved environmental regulatory compliance, decreased waste of manufactured pharmaceutical products, increased availability of skilled personnel, and heightened competitiveness of pharma units within the cluster.
The PMC will supervise the execution of the program and each approved project, generating monitoring reports and supporting the SSC and DoP in overseeing the program.
Subsidy Name: Pharmaceutical Technology Enhancement Support Scheme (PTESS)
Eligibility Criteria: The financial assistance program aims to support micro, small, and medium-sized pharmaceutical businesses with established performance history, seeking to enhance their technological capabilities in order to comply with the standards set by the World Health Organization’s Good Manufacturing Practices (WHO-GMP) or Schedule M regulations.
Benefits: The scheme provides either up to 5% per annum interest subvention (6% for SC/ST-owned units) on loan components eligible under the scheme up to Rs. 10 crore for a maximum period of 3 years on a reducing balance, or a 10% credit-linked capital subsidy on the loan component eligible under the scheme, with a maximum limit of Rs. 10 crore.
Application Process: Eligible applicants should apply in the specified format through the online portal established by the Project Management Consultant (PMC). Applications will be accepted on a rolling basis until 29th February 2024, subject to budget availability.
Subsidy Name: Promotion and Advancement of Pharmaceutical & Medical Devices Sector (PAPMDS)
Eligibility Criteria: This scheme targets the pharmaceutical and medical devices industry in India. Eligible applicants consist of acknowledged industry associations, organizations or firms with experience in executing studies or surveys in pharmaceuticals and medical devices, as well as government or quasi-government agencies with relevant expertise.
Benefits: The scheme’s objective is to foster the expansion and development of the pharmaceutical and medical devices industry by conducting research, organizing awareness programs, developing databases, and promoting industry-associated events. Financial support will be granted to eligible organizations for various activities, such as coordinating seminars, conferences, workshops, and exhibitions, in addition to creating databases and IT-enabled systems.
Application Process: Eligible organizations should apply at least 60 days before the proposed event via an online portal. The Project Management Consultant (PMC) will review the application and submit its recommendation to the Scheme Steering Committee (SSC) for approval and disbursement of the grant by the Department of Pharmaceuticals.
Production Linked Incentive (PLI) scheme for Pharmaceuticals
Subsidy Name: Production Linked Incentive (PLI) Scheme for Pharmaceuticals
Benefits:
- Strengthen India’s manufacturing capabilities by promoting investment and production within the pharmaceutical sector.
- Encourage product diversification towards high-value goods in the pharmaceutical industry.
- Develop global leaders with state-of-the-art technology and the capacity to integrate into global value chains.
Eligibility:
- Indian-registered manufacturers of pharmaceutical products.
Applicants are categorized based on their Global Manufacturing Revenue (GMR) for FY 2019-20.
- Group A: GMR of pharmaceutical goods ≥ Rs. 5,000 crore.
- Group B: GMR of pharmaceutical goods between Rs. 500 (inclusive) crore and Rs. 5,000 crore.
- c. Group C: GMR of pharmaceutical goods < Rs. 500 crore. This group includes a sub-group for MSMEs.
Application Process:
- Applications under the Scheme can be made by any manufacturer registered in India.
- Submit a fully completed application before the deadline, and an acknowledgment will be issued after initial examination.
- Applicants will be assessed and considered for approval based on predefined selection criteria.
- Incentives will be disbursed to selected participants who meet the annual threshold criteria of minimum cumulative investment and minimum growth in sales, provided disbursement claims are deemed accurate.
- The Department of Pharmaceuticals and the Empowered Group of Secretaries (EGoS) will monitor the approval and disbursement process.
Production Linked Incentive (PLI) Scheme for Encouraging Domestic Production of Critical Key Active Pharmaceutical Ingredients (APIs) Drug Intermediates (DIs), and Starting Materials (KSMs),
Subsidy Name: Production Linked Incentive (PLI) Scheme for fostering domestic production of critical KSMs, DIs, and APIs in India.
Benefits: This scheme provides financial incentives based on the sales of 41 identified products over six years to enhance domestic manufacturing and decrease India’s reliance on critical API imports.
Eligibility: Manufacturers must be registered in India and meet the threshold investment criteria for greenfield projects listed below. The scheme is exclusively applicable to greenfield projects.
Eligible manufacturers must meet the following threshold investment criteria for greenfield projects:
- Fermentation-based 04 KSMs/Drug Intermediates: Investment of Rs. 400 crore.
- Fermentation-based 10 niche KSMs/Drug Intermediates/APIs: Investment of Rs. 50 crore.
- Key Chemical Synthesis-based 04 KSMs/Drug Intermediates: Investment of Rs. 50 crore.
- Other 23 Chemical Synthesis-based KSMs/Drug Intermediates/APIs: Investment of Rs. 20 crore.
Application Process: Manufacturers can apply for the scheme during the 120-day application window by submitting a comprehensive initial application. Eligible applications will be assessed and considered for selection, with incentives disbursed to selected applicants who meet the required thresholds and have accurate disbursement claims.
Subsidy Name: Bulk Drug Parks Promotion Scheme
Benefits:
- Financial support for developing common infrastructure facilities in three Bulk Drug Parks proposed by State Governments and selected under the scheme.
- Encourages the establishment of bulk drug parks to enhance the competitiveness of the domestic bulk drug industry.
- Assists the industry in adhering to environmental standards at lower costs through shared waste management systems.
Eligibility:
- Bulk Drug Park projects chosen under the Scheme, proposed by State Governments.
- State Implementing Agency (SIA) must be a legal entity established by the concerned State government for implementing the Bulk Drug Park project.
Application Process:
- State Governments propose Bulk Drug Park projects for consideration under the scheme.
- Proposals are evaluated and approved by the Scheme Steering Committee (SSC) formed by the Department of Pharmaceuticals (DoP).
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Production Linked Incentive (PLI) Scheme for Supporting Domestic Manufacturing of Medical Devices
Subsidy Name: Medical Device Parks Promotion Scheme
Benefits:
- Easy access to standardized testing and infrastructure facilities
- Heightened competitiveness due to the development of world-class common infrastructure facilities
- Significant reduction in medical device production costs
- Improved availability and affordability of medical devices in the domestic market
- Resource optimization and economies of scale
Eligibility:
- Medical Device Parks proposed by State Governments and selected under the program.
- Initiatives carried out by a Regional Implementation Organization (RIO), a lawful establishment created by the respective state administration.
Application Process:
- The scheme’s details will be published on the Department of Pharmaceuticals (DoP) website.
- Applications submitted under the scheme will receive approval from the Scheme Steering Committee (SSC) established by the Department of Pharmaceuticals.
Subsidy Name: Production Linked Incentive Scheme for Encouraging Domestic Production of Medical Devices
Benefits: This scheme aims to stimulate domestic manufacturing and attract substantial investments in India’s medical devices sector. Financial incentives are provided to selected companies based on their threshold investment and incremental sales of medical devices within targeted segments.
Eligibility: For eligibility under the Production Linked Incentive Scheme for Encouraging Domestic Production of Medical Devices, a company must meet the following criteria:
- Engaged in manufacturing goods within specified target segments.
- Applicable only for greenfield projects.
- Meet the threshold minimum investment of INR 180 Crore over three years, with cumulative minimums as follows:
- Year 1: INR 60 Crore
- Year 2: INR 120 Crore
- Year 3: INR 180 Crore
- Meet the threshold minimum incremental sales of manufactured goods as follows:
- Year 1: INR 120 Crore
- Year 2: INR 240 Crore
- Year 3: INR 360 Crore
- Year 4: INR 460 Crore
- Year 5: INR 560 Crore
- Companies that meet these eligibility criteria can receive financial incentives at a rate of 5% on incremental sales of manufactured goods for each of the five years (Year 1 to Year 5), starting with the Financial Year 2021-22.
Application Process:
- Submit a comprehensive initial application within the 120-day application window.
- Eligible applications will be evaluated and considered for selection.
- Incentives will be disbursed to selected applicants who meet the required thresholds and submit accurate disbursement claims.
Target Segments: The program encompasses four specific categories of medical equipment:
- Oncology care/Radiation therapy instruments
- Diagnostic & Imaging devices (involving both ionizing and non-ionizing radiation products) and Nuclear Imaging Equipment
- Anesthetic & Cardiopulmonary instruments, such as Cardiopulmonary Catheters and Kidney Care Devices
- All types of prosthetics, including embedded electronic devices like Hearing Implants and Heart Rhythm Regulators
Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP)
Subsidy: (PMBJP) Pradhan Mantri Bhartiya Janaushadhi Pariyojana
Benefits:
- Offers affordable, high-quality medicines and surgical items to all, reducing out-of-pocket expenditures.
- Promotes the use of generic medicines.
- Creates employment opportunities by enabling entrepreneurs to open PMBJP Kendras.
- Provides incentives of up to INR 5 lakh for Kendra owners, with additional incentives for specific categories and areas.
Eligibility:
- Entrepreneurs from any category, women, Divyang, SC, ST, and those opening Kendras in aspirational districts and North-Eastern States.
- Procurement of medicines from WHO-GMP certified suppliers and passing NABL-accredited lab tests.
Application Process:
- Open a PMBJP Kendra and connect it with Pharmaceuticals & Medical Devices Bureau of India (PMBI) through software.
- Incentives are provided based on monthly purchases made from PMBI.
- Additional incentives are available for Kendras opened in specified areas and by specified categories of persons (backward areas, North-Eastern States, women entrepreneurs, Divyang, SC, and ST).
Consumer Awareness, Publicity, and Price Monitoring (CAPPM)
Subsidy Name: Central Sector Scheme for Consumer Awareness, Publicity, and Price Monitoring
Benefits:
- Monitors notified medicine prices and ensures their availability.
- Tracks changes in prices for both scheduled and non-scheduled drug formulations.
- Gathers and analyzes market-based data for scheduled and non-scheduled formulations.
- Collects test samples of medicines at the retail market when required.
- Conducts training, seminars, and workshops for consumer awareness and publicity.
- Collaborates with various stakeholders at the state and UT level.
Eligibility: State and Union Territory governments in India, categorized based on their population. Category I includes states with more than 3% of the total population, Category II with less than 3% but more than 1%, and Category III with less than 1%.
Application Process: State and Union Territory governments need to provide the required office space for the PMRU (Price Monitoring and Resource Unit) free of cost. All other expenses, both non-recurring and recurring, will be met under the scheme. Any additional expenditure will have to be borne by the respective State or Union Territory. Personnel for the PMRUs, such as Project Manager, Field Researcher, and Data Input Specialist, will be hired via an external service provider on a contractual agreement in accordance with existing protocols.
Assistance to Pharmaceutical Industry for Common Facilities
Subsidy Name: Cluster Development Scheme for Pharma Sector
Benefits: The scheme aims to enhance the competitiveness of the pharma sector through the development of Common Facility Centers (CFCs) for various services such as testing laboratories, technology improvement, adoption of best manufacturing practices, and marketing of products. The grant-in-aid under this category has a cap of either Rs 20 crore per cluster or 70% of the project cost, whichever is lower.
Eligibility:
- The project must be implemented through a Special Purpose Vehicle (SPV) with a minimum of 3 pharma units (including Bulk Drug and Medical Device Units) as its shareholders.
- Pharmaceutical companies must possess a minimum 51% ownership in the Special Purpose Vehicle (SPV).
- The aggregate financial value of the Special Purpose Vehicle (SPV) members must be equal to the requested grant sum, and every SPV participant should possess a net worth of a minimum of 1.5 times their intended equity investment.
- The SPV members must be legally independent entities without any related-party relationship with each other as described under Accounting Standard (AS) 18 of the Companies (Accounting Standard) Rules, 2006.
Application Process:
- Form an SPV registered under the Company Act or Registration of Societies Act.
- The Special Purpose Vehicle (SPV) should prepare a Comprehensive Project Report (DPR) at its own expense, focusing on strengthening competitiveness, upgrading technology, implementing best practices in manufacturing, promoting products, and creating job opportunities.
- Submit the preliminary proposal, including the major features of the proposed project and availability of land, to the Scheme Steering Committee (SSC) for in-principle approval.
- Fulfill the conditions for final approval, including establishment of a project-specific SPV, execution of shareholders agreement and other related agreements, appraisal of the DPR by the Project Management Consultant (PMC), procurement of requisite land, establishment of a project-specific Current Account with a Scheduled Commercial Bank, and tying up sources of funds for the balance amount.
- After final approval by the SSC, funds will be released in installments based on the project’s progress and requirements, following the guidelines provided in the scheme.
Pharmaceutical Promotion and Development Scheme (PPDS)
Subsidy Name: PPDS – Pharmaceutical Promotion and Development Scheme
Benefits: The PPDS aims to promote, develop, and foster export promotion in the pharmaceutical sector by providing financial support for activities such as seminars, conferences, exhibitions, delegations, studies, consultancies, and more. The scheme supports training and knowledge improvement programs, organizing events, conducting research studies, purchasing relevant materials, giving awards to industry achievers, creating awareness and publicity, and other activities determined by the Department of Pharmaceuticals.
Eligibility: The Department of Pharmaceuticals provides financial support to institutions, organizations, voluntary organizations, or non-government organizations. These entities are eligible to receive grants-in-aid under the PPDS.
Application Process: While specific application procedures might not be provided in the given information, one can assume that interested and eligible organizations would need to submit a proposal or application to the Department of Pharmaceuticals for consideration. It’s likely that the Department of Pharmaceuticals will have guidelines and procedures in place for application submissions.
Training and Knowledge Enhancement Programs under the Pharmaceutical Promotion and Development Scheme (PPDS):
Objectives:
- Conduct training and knowledge enhancement programs on relevant topics to support the growth of the pharmaceutical industry.
- Organize summits, conventions, exhibitions, pharmacy weeks, meetings, and other related events both nationally and internationally, as well as create promotional materials like films and displays.
Eligible Organizations:
- Institutions, organizations, non-profits, and non-governmental organizations.
- Government organizations, academic bodies, and national/state-level industry associations, including FICCI, CII, ASSOCHAM, and PHD Chamber of Commerce.
Criteria:
- The target audience must consist of participants from the pharmaceutical, medical device, and related sectors.
Financial Support Tiers:
- Programs organized by government departments/institutions/agencies: Up to 100% grant-in-aid support.
- Activities arranged by autonomous bodies, private agencies, industry associations, private institutions, and NGOs at the Department’s initiative or based on subjects suggested by the Department: Up to 75% grant-in-aid support.
- Events independently organized by autonomous organizations, private agencies, industry associations, private institutions, NGOs, and aligned with the Department’s mission: Financial support up to 50% in the form of grant-in-aid.
- Large-scale events like India Pharma, India Medical Expo, and other international events in partnership with the Department of Pharmaceuticals: Grant-in-aid will be calculated based on submitted estimates and factors such as previous expenses.
Grant Release:
- Grants will be disbursed upon submission of required information/documents, such as event date confirmation, disclosure of funding sources, and assurance that no Utilization Certificate is pending from previous grants.
Post-Event Documentation:
- Following the event, organizations must submit various documents and information, including event proceedings, advertisements/publicity, participant and resource person lists, suggestions/queries from participants, event outcomes/recommendations, performance-cum-achievement report, follow-up actions, and a Utilization Certificate signed by the organization’s head.
In summary, the Indian government’s support through various subsidies and schemes has fostered a favorable environment for the growth of the pharmaceutical industry. These subsidies encompass a wide range of activities, including technology upgrades, promotion of bulk drug parks, production-linked incentives, and training and knowledge enhancement programs.
Each subsidy has its unique eligibility criteria, benefits, and application process. However, all aim to strengthen the pharmaceutical sector’s competitiveness, improve medicine quality, and reduce reliance on imports for essential APIs.
The implementation of these subsidies has facilitated the growth of the pharmaceutical industry in India, providing affordable, quality medicines to the population. In the coming years, it is anticipated that the pharmaceutical industry will continue to play a vital role in the development of the Indian economy and the improvement of public health.
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