How Pharma PLI Scheme Can Change the Dependency of API Import

How Pharma PLI scheme can change the dependency of API import

The Indian pharmaceutical industry is the third-largest in the world by volume. PIL scheme was envisioned to ensure greater solidity of the Indian pharmaceutical to contribute significantly and external shocks. This scheme’s main aim is to achieve affordable health care globally on a sustained basis. 

Department of pharmaceuticals has launched supporting schemes to support domestic and global players to enhance their investment and production. 

Here in this article, you will get a brief idea about the PIL scheme and how things work in this scheme, what our aims and targets for the upcoming five-year session are, and our contributions to globalization and industrialization. 

About Pharma PLI Scheme 

Production linked incentive or PLI scheme aims to give incremental sales or incentives to the companies from products manufactured in domestic units. It invites foreign companies to set up their business units in India and encourages local companies to expand or set up their manufacturing units. It will create more employment opportunities and will cut down the country’s need for imports from other countries. 

Now let’s understand the PLI scheme in brief:

  • It was launched in April 2020 on a large scale for manufacturing in the electronic sector, but by the end of 2020, it was introduced for ten sectors. 
  • IT ministry of India introduced this national policy to increase sales of four to six percent of electronic companies which manufacture transistors, diodes, mobile phones, etc.
  • The main motto of this scheme was to invite foreign investors to set up their business units in India and promote local investors to expand their units to generate employment.  
  • As far as eligibility criteria are concerned, electronic manufacturing companies are either in India or have to register their name to apply for this scheme. 

Here are the ten new sectors to which the scheme has been expanded, along with an approved financial outlay:

  • Advance chemistry cell battery
  • Automobiles and auto components
  • Pharmaceutical drugs

PIL scheme for the pharmaceutical drugs sector was introduced for five years, from 2020-21 to 2028-29. It is expected to generate employment for both unskilled and skilled personnel. It was estimated that it would offer 20,000 direct and 80,000 indirect jobs. 

  • Telcom and networking products
  • High-efficiency solar PV modules
  • Specialty steel
  • Food products
  • Textile products
  • White goods 
  • Electronic/technology products

It was set up for the benefit of a few global investors, especially domestic manufacturers in India. 

The government aims to achieve the following targets; 

  • This scheme will enhance the globalization of the automotive sector. 
  • India is the world’s second-largest steel producer, and introducing this scheme will benefit the country by expanding export opportunities. 
  • Similarly, sectors like white goods, pharmaceuticals, solar panels, and others are introduced to make India a manufacturing hub and contribute to the country’s economic growth. 
  • The textile industry of India is one of the largest sectors. Introducing this scheme will attract large investment in this sector and boost domestic manufacturing. 

Pharma PLI Scheme impact on imports

The production-linked incentive scheme has helped the government to lower imports. It was only possible by encouraging domestic manufacturing of pharmaceuticals. 

Pharmaceutical industries play a vital role in making Atma Nirbhar Bharat by reducing the dependency on other countries and enhancing the supply of active pharma ingredients and devices necessary in the medical field. 

By amending the Drugs and cosmetics act 1940, the government is helping industries promote, expand their businesses, and involve these industries in the decision-making process. 

During the first wave of pandemic COVID-19, India supplied medicines and other pharmaceutical ingredients to 125 countries. India’s contribution to saving lives worldwide is noticeable. that is why Indian pharmacy is referred to as the world’s pharmacy. 

How Will It Reduce the Dependency on API Imports?

 According to India ratings and research, India’s PLI scheme will reduce the dependence on imports for key active APIs. It expects to reduce the import dependency from 70 percent to 43 percent, which is remarkable. 

The PLI scheme will attract foreign investments and promote high-tech and complex products like in vitro diagnostic devices and emerging therapies in India. 

Repeated supply of raw material disruption from china has become a new topic of concern for global pharma companies, as many countries, including India, are dependent on China for this. 

Many MNC companies are looking for an alternative to keep their supplies uninterrupted. 

It is evident that the PIL scheme will be a positive step towards reducing the dependency of India on china, which will be visible in the next five to seven years. 

The agency opined that the PIL scheme would benefit Active pharma ingredient companies and give some extra push to build up the necessary infrastructure. 


For more details related to the PIL scheme, you can visit our website or call us, and our team is here to guide you and solve all your queries. 


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