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Laxmi Yadav, Mumbai July 23 , 2020
The Department of Pharmaceuticals (DoP) has come out with notification for Rs, 3,000 crore bulk drug parks’ promotion scheme and Rs. 6,940 crore production linked incentive (PLI) scheme for promotion of domestic manufacturing of critical key starting materials (KSMs)/ drug intermediates (DIs) and active pharmaceutical ingredients (APIs) in India.

The gazette notification dated July 21, 2020 superseded the earlier notification of DoP issued on this subject on June 2, 2020.

India is significantly dependent on import of bulk drugs which accounted for 63% of the total pharmaceutical imports in the country during fiscal year 2018-19.  A committee on drug security constituted by the DoP identified 53 APIs for which the country is heavily dependent on imports.

PLI scheme which is applicable only for greenfield projects intends to boost domestic manufacturing of identified KSMs, Dis and APIs by attracting large investments in the sector and thereby reduce India’s import dependence in critical APIs.

Under the scheme, financial incentives shall be given for six years based on sales made by selected manufacturers for 41 products which cover all the identified 53 APIs. The tenure of the scheme is from FY 2020-21 to FY 2029-30.

For fermentation based products including penicillin G, 7-ACA, erythromycin thiocynate, clavulanic acid, neomycin, gentamycin, betamethasone, dexamethasone, prednisolone, rifampicin, vitamin B1, clindamycin base, streptomycin, tetracycline, incentive for FY 2023-24 to FY 2026-27 would be 20%, incentive for 2027-28 would be 15% and incentive for 2028-29 would be 5%. The investment threshold limit for fermentation based products ranges from Rs. 50 crore to Rs, 400 crore.

For chemical synthesis based products-- cyclohexane diacetic acid (CDA), 2-methyl-5 nitro-Imidazole (2-MNI), dicyandiamide (DCDA), para amino phenol, meropenem, atorvastatin, olmesartan, valsartan, losartan, levofloxacin, sulfadiazine, ciprofloxacin, ofloxacin, norfloxacin, artesunate, telmisartan, aspirin, diclofenac sodium, levetiracetam, carbidopa, ritonavir, lopinavir, acyclovir, carbamazepine, oxcarbazepine, vitamin B6, levodopa, incentive for FY 2022-23 to FY 2027-28 would be 10%.

The investment threshold limit for chemical synthesis based products ranges from Rs. 20 crore to Rs. 50 crore.

Manufacturers of critical KSMs/DIs and APIs registered in India can apply for the scheme. The applicants can submit applications during the window period which is four months. Incentive shall be released to selected applicants, meeting the required thresholds and whose disbursement claims are found to be in order.

The scheme shall be implemented through a nodal agency which acts as Project Management Agency (PMA). It will be responsible for appraisal of applications and verification of eligibility; examination of claims eligible for disbursement of incentive; compilation of data regarding progress and performance of the scheme including threshold investment and sales of manufactured goods of applicants selected under the scheme.

An Empowered Committee (EC) chaired by CEO, NITI Aayog will be formed to consider applications, as found eligible by the PMA, for approval under the scheme.

The members of EC will include DoP secretary, department of chemicals and petrochemicals secretary, department for promotion of industry & internal trade secretary, department of commerce secretary, ministry of environment, forest and climate change secretary, department of health & family welfare secretary. Experts may be invited as special invitees, as may be felt necessary, from time to time.

It will consider claims, as examined and recommended by the PMA, for disbursement and conduct a periodic review of the projects of the selected applicants with respect to their investments, employment generation and production under the scheme. It will also be authorized to carry out any amendments in the scheme and the guidelines except revising the incentive rates, ceilings or eligible products.

The aim of the scheme for promotion of bulk drug parks is to promote setting up of bulk drug parks in the country for providing easy access to world class common infrastructure facilities to bulk drug units located in the parks in order to significantly bring down the manufacturing cost of bulk drugs and thereby make India self-reliant in bulk drugs by increasing the competitiveness of the domestic bulk drug industry. It will help industry meet the standards of environment at a reduced cost through innovative methods of common waste management system

The tenure of the scheme is from FY 2020-2021 to FY 2024-2025.

Financial assistance under the scheme will be provided for creation of common infrastructure facilities in three bulk drug parks proposed by state governments and selected under the scheme.

Financial assistance to a selected Bulk Drug Park would be 70% of the project cost of common infrastructure facilities. In case of North Eastern States and Hilly States (Himachal Pradesh, Uttarakhand, Union Territory of Jammu & Kashmir and Union Territory of Ladakh) financial assistance would be 90% of the project cost. Maximum assistance under the scheme for one bulk drug park would be limited to Rs. 1,000 crore.

The common facilities provided to individual bulk drug units in the bulk drug park such as central effluent treatment plant, solvent recovery and distillation plant, steam generation and distribution system, common cooling system and distribution network, common logistics facilities, advance laboratory testing centre, emergency response centre, centre of excellence etc.

A bulk drug park project selected under the scheme will be implemented by a State Implementing Agency (SIA) set up by the concerned state government.

The Scheme Steering Committee (SSC) constituted by DoP will approve the proposals under the scheme. The SSC chaired by DoP secretary will consist of members-- financial adviser, DoP, joint secretary, ministry of environment, forest and climate change, joint secretary, department for promotion of industry and internal trade joint secretary, department of health and family welfare, DCGI.

Joint secretary (policy), DoP will be convenor of SSC which will take all decisions required for successful implementation of the scheme, including any modifications if required.

The detailed guidelines of both schemes will be issued by the DoP shortly.

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