DoP Notifies PLI Scheme For Promoting Domestic Manufacturing Of Medical Devices

Mumbai, 23 July 2020:

The Department of Pharmaceuticals (DoP) has finally notified Production Linked Incentive (PLI) Scheme for promoting domestic manufacturing of medical devices through a gazette notification dated July 21, 2020. Total financial outlay of the Scheme is Rs. 3,420 crore.

The incentive per company will be applicable on incremental sales of manufactured goods over Base Year subject to ceilings as decided by the Empowered Committee. This has been done to address disability in manufacturing of medical devices in India vis-à-vis other major manufacturing economies. The PLI scheme was approved by the Government of India on March 20, 2020 with the objective to boost domestic manufacturing and attract large investments in the medical devices sector.

Under the Scheme, financial incentives shall be given to selected companies based on threshold investment and incremental sales (over Base Year) of medical devices covered under target segments. Under the Scheme, financial incentive shall be given to selected companies at the rate of 5% of incremental sales (over Base Year) of goods manufactured in India and covered under Target segments, for a period of five years i.e. from FY 2021-22 to FY 2025-26.

The Scheme is applicable only for greenfield projects. Financial incentive under the scheme shall be provided only to companies engaged in manufacturing of goods covered under target segments in India. Eligibility shall be subject to thresholds of investment and incremental sales of manufactured goods (covered under Target Segments) over Base Year. An applicant must meet all the threshold conditions to be eligible for disbursement of incentive. Eligibility under Production Linked Incentive scheme shall not affect eligibility under any other Scheme and vice-versa. The tenure of the scheme is from FY 2020-21 to FY 2026-27.

The application window for receiving the applications shall be 120 days. Financial Year 2019-20 shall be treated as the base year for computation of incremental sales of manufactured goods.

Assessment of threshold investment and incremental sales of manufactured goods shall be based on details furnished to the departments/ministries/agencies and statutory auditor certificates. Application under the Scheme can be made by any company registered in India.

With Prime Minister Modi’s thrust on building “Atma Nirbhar Bharat” and strengthening of drug security, the Union Cabinet had approved schemes for supporting development of three bulk drugs parks and four medical device parks on March 21, 2020 in order to reduce dependency on imports and boost local manufacturing and employment. Pharmabiz