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Govt issues notification on PLI Scheme with a few amendments

Under the PLI Scheme, the industry seeks clarity on the definition of greenfield projects

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The Department of Pharmaceuticals (DoP) has issued a notification with details of the production linked incentive (PLI) scheme. The current notification supersedes the one issued earlier in June  2020 and includes some amendments in the eligibility criteria, commencement period of chemical synthesis based products as well as fermentation-based products, etc., as recommended by the empowered committee (EC) of PLI Scheme. However, the total financial outlay of the scheme remains the same, Rs 6940 crores for identified 53 APIs of 41 products.

As per the brief guidelines by the DoP in June 2020, the incentive for fermentation-based products would have started from 2022-23 whereas now it will start from FY 2023-24. Similarly, for the chemical synthesis-based products, the incentive would be now given from FY 2022-23 instead of FY 2021-22. As per the current guidelines for the PLI Scheme, the financial incentive under the scheme would be provided on the sales of 41 identified products for six years.

Dr Viranchi Shah, National Vice President, IDMA, said, “We welcome the gazette notification on the PLI scheme for promotion of API manufacturing in India. The government’s objective is to make the Indian pharma industry Atmanirbhar in API, and this scheme is an important step towards that. The DoP is yet to release the detailed guidelines on the PLI Scheme, once they are announced, we shall review them in detail. After reviewing, if we (the industry) feel some key points require immediate attention, then on behalf of the industry, we will make the representation.”

While commenting on the amendments in the notified PLI scheme, Shah informed, “The government has deliberated the issues regarding PLI Scheme with IDMA, during the formation of the Scheme. We had made many important and constructive suggestions to authorities about the required support for building up the infrastructure and facilities so that the industry can take benefits of the scheme. If this scheme is laid down correctly and implemented effectively, it may prove to be a very important game-changer in API space.”

However, an industry expert seemed surprised by the amendments. He pointed out that in the brief guidelines the department had mentioned that the scheme eligibility will be subject to a threshold of incremental investment for manufacturing of critical KSMs, APIs and DIs, whereas, in the gazetted notification of PLI Scheme it is stated that the eligibility shall be subject to threshold investment in greenfield projects.”

For the PLI scheme, the industry is looking for a definition of greenfield projects. It is assumed that the detailed PLI scheme guidelines will see some alteration in the areas of minimum capacity requirements, product-wise application compulsion etc.

The Project Management Agency (PMA) will be responsible for providing secretarial, managerial and implementation support. The detailed constitution, functioning and responsibilities of the PMA will be elaborated in the scheme guidelines.

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