Domestic pharmaceutical Small And Medium Enterprises (SMEs) which manufacture bulk drugs or Active Pharmaceutical Ingredients (APIs) have raised concern that Central Government has offered more than 71% share to prime handful of providers and only 11% share to the SMEs in the second production linked incentive (PLI) scheme aimed at providing enhance to the domestic pharmaceutical business.
There are about 7000 pharma SMEs in the nation today.
Another concern raised is that in the PLI second scheme utilizing terminology of foreign multinational providers (MNCs) to participate is objectionable for the reason that Chinese providers may possibly also participate to set up plants in India to compete with the Indian pharmaceutical providers.
The Union cabinet authorized the second PLI second scheme in June 2021 to enhance domestic pharmaceutical sector for monetary years 2020-21 to 2028-29. About Rs. 15,000 crore worth of incentives is envisaged to be supplied beneath the scheme, with total incremental sales worth Rs. 2.94 trillion and incremental exports of Rs. 1.96 trillion anticipated throughout the six years.
Earlier in July 21, 2020, Department of Pharmaceuticals (DoP) had notified Rs. 3,000 crore bulk drug parks promotion scheme and Rs. 6,940 crore PLI scheme for promotion of domestic manufacturing of crucial Key Starting Materials (KSMs)/ Drug Intermediates (DIs) and APIs in India.
According to B R Sikri, Vice President, Bulk Drugs Manufacturers Association of India (BDMAI), “There are certain bottlenecks in these two schemes which, unless and until are seriously deliberated with the industry, may end up with big setbacks at a later date. PLI- I Scheme comprises two categories i.e. chemicals synthesis category and fermentation category. While the chemicals synthesis category was more or less accepted by the industry as per government expectation but fermentation category following are the reservations observed by the industry, like less incentive offered by the Government. Secondly, availability of technology is a big concern. Power availability and tariff of power are other areas of concern. There are hardly 7 to 8 top companies who are capable of setting up fermentation categories of products in India today.”
“The budget allocated to SMEs also is very miniscule with only Rs 1600 Crore in the PLI-I scheme,” according to an business official.
APIs such as valsartan, losartan, levofloxacin, sulfadiazine, ciprofloxacin, and ofloxacin amongst other folks, will be manufactured beneath the PLI –I scheme.
Government had launched initial PLI scheme for promotion of domestic manufacturing by setting up greenfield plants with minimum domestic worth addition in 4 distinctive Target Segments (in two fermentation based – at least 90% and in the two chemical synthesis based – at least 70%) for 41 items with a total outlay of Rs. 6,940 crore for the period 2020-21 to 2029-30.
Domestic pharmaceutical providers have steadily stopped manufacturing a lot of of the APIs and began importing APIs, which is a less expensive alternative with improved profit margins on drugs. With availability of less expensive versions of API from China, the Indian pharma business heavily depends upon China for about 68% of the API and DI.