AI SummaryProduction Linked Incentive (PLI) Scheme for Pharmaceuticals supports domestic drug manufacturing by offering financial incentives on incremental sales over a six-year period. The scheme, launched by the Department of Pharmaceuticals under the Ministry of Chemicals and Fertilizers, has a total outlay of ₹15,000 crore and runs from FY 2021-22 to FY 2026-27. Small Industries Development Bank of India (SIDBI) acts as the Project Management Agency to implement the programme.
While the application window for new participants closed on 31 August 2021, selected companies continue to file annual incentive claims through the official portal. The scheme focuses on high-value pharmaceutical products including biopharmaceuticals, complex generic drugs, patented medicines, and active pharmaceutical ingredients.
Production Linked Incentive (PLI) Scheme for Pharmaceuticals - Overview
The scheme aims to strengthen India's pharmaceutical manufacturing capabilities and reduce import dependence for critical drugs. It covers three product categories with different incentive rates. Category 1 and 2 products receive 10% incentive for the first four years, tapering to 8% and 6% in years five and six. Category 3 products get 5%, 4%, and 3% respectively over the same periods.
Eligible applicants are grouped based on their Global Manufacturing Revenue in FY 2019-20. Group A includes companies with revenue of ₹5,000 crore or more, Group B covers ₹500 crore to ₹5,000 crore, and Group C includes those below ₹500 crore. Each group has specific minimum investment commitments spread over five years.
Key Information
| Detail | Information |
|---|---|
| Scheme Name | Production Linked Incentive (PLI) Scheme for Pharmaceuticals |
| Level | Central |
| Launched By | Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers |
| Project Management Agency | Small Industries Development Bank of India (SIDBI) |
| Total Outlay | ₹15,000 crore |
| Scheme Period | FY 2021-22 to FY 2026-27 (6 years) |
| Base Year | FY 2019-20 |
| Application Window | Closed (02 June 2021 to 31 August 2021) |
| Official Portal | pli-pharma.udyamimitra.in |
| Incentive Disbursement | Annual claims, 75% on approval, 25% after audited accounts |
Benefits
The scheme provides financial incentives on net incremental sales of eligible pharmaceutical products over six years. The total budget of ₹15,000 crore is allocated across three groups:
| Product Category | Years 1-4 | Year 5 | Year 6 |
|---|---|---|---|
| Category 1 & 2 | 10% | 8% | 6% |
| Category 3 | 5% | 4% | 3% |
Group-wise allocation ceilings and maximum incentive per applicant:
| Group | Allocation Ceiling | Max Incentive per Applicant |
|---|---|---|
| Group A | ₹11,000 crore | ₹1,000 crore |
| Group B | ₹2,250 crore | ₹250 crore |
| Group C | ₹1,750 crore | ₹50 crore |
Selected participants must file incentive claims every year within one month of the financial year ending. Upon approval, 75% of the claim amount is released promptly, while the remaining 25% comes after submitting final audited accounts. A self-certified quarterly review report is also required within 30 days of each quarter ending.
Eligibility
To qualify, a company must be a pharmaceutical manufacturer registered in India and actively producing eligible goods under the scheme. Companies that have already claimed incentives for the same product under another PLI scheme (such as the Bulk Drugs PLI) cannot apply here.
Eligibility is based on Global Manufacturing Revenue in FY 2019-20 and committed investment over five years:
- Group A: Revenue ₹5,000 crore or more, minimum investment ₹1,000 crore over 5 years
- Group B: Revenue ₹500 crore to ₹5,000 crore, minimum investment ₹250 crore over 5 years
- Group C: Revenue below ₹500 crore, minimum investment ₹50 crore over 5 years
- Group C (MSME): Must meet committed investment and achieve at least ₹50 lakh turnover in the first year
Land cost is not counted as investment. From FY 2023-24 onwards, participants must maintain minimum 7% year-on-year sales growth to continue receiving incentives.
Eligible Products
The scheme covers three categories of pharmaceutical products:
- Category 1: Biopharmaceuticals, complex generic drugs, patented drugs or drugs nearing patent expiry, cell-based or gene therapy drugs, orphan drugs, special empty capsules (HPMC, Pullulan, enteric), complex excipients, phyto-pharmaceuticals
- Category 2: Active Pharmaceutical Ingredients (APIs), Key Starting Materials (KSMs), Drug Intermediates (DIs)
- Category 3: Repurposed drugs, autoimmune drugs, anti-cancer drugs, anti-diabetic drugs, anti-infective drugs, cardiovascular drugs, psychotropic drugs, anti-retroviral drugs, in-vitro diagnostic devices
Companies already receiving benefits under the PLI Scheme for Bulk Drugs for the same product are not eligible.
Application Process
The application window for this scheme was open from 2 June 2021 to 31 August 2021 and has now closed. For reference, the process was as follows:
STEP 1 - Visit the official portal at https://pli-pharma.udyamimitra.in/ and complete registration with mobile number verification.
STEP 2 - Fill the online application form divided into six sections: Applicant Details, Product Selection, Ranking Criteria, Payment Proof, Document Upload, and Application Submission.
STEP 3 - Pay the non-refundable application fee electronically as specified in the scheme guidelines.
STEP 4 - Project Management Agency (SIDBI) conducts preliminary examination within 15 working days and issues acknowledgement.
STEP 5 - If selected, submit a Bank Guarantee and Undertaking in favour of the Department of Pharmaceuticals within two weeks of receiving the approval letter.
STEP 6 - File annual incentive claims through the portal with required documentation within one month of each financial year ending.
Documents Required
Applicants need to prepare the following documents for a smooth application and claim process: Audited Financial Statements, Cost Accountant Certificate for production costs, Bank Guarantee (post-selection), Undertaking (post-selection), Product Registration Documents, and Self-Certified Quarterly Review Reports.
Claim Process
Selected participants must follow the annual claim cycle:
STEP 1 - Submit complete claim application with supporting documents within one month of the financial year ending through the online portal.
STEP 2 - Project Management Agency examines and verifies eligibility within 60 days, then recommends to the Department of Pharmaceuticals.
STEP 3 - Upon approval, 75% of the incentive amount is disbursed via PFMS (Public Financial Management System).
STEP 4 - Submit final audited accounts by 31 December of the following financial year to receive the remaining 25%.
STEP 5 - Reconcile sales of eligible products with prescribed documents for the balance payment release.
References
Scheme Guidelines [Department of Pharmaceuticals]
Scheme Instructions and Circulars [Official Portal]
PIB Press Release on PLI Scheme for Pharmaceuticals
FAQ's
What is the total financial outlay for the PLI Scheme for Pharmaceuticals?
The scheme has a total outlay of ₹15,000 crore inclusive of administrative expenditure, spread over six years from FY 2021-22 to FY 2026-27.
Can new applications be submitted for this scheme in 2026?
No, the application window was open from 2 June 2021 to 31 August 2021 and has closed. Only selected participants can file annual incentive claims.
What is the minimum sales growth required to continue receiving incentives?
From FY 2023-24 onwards, participants must achieve at least 7% year-on-year growth in sales of approved eligible products to remain eligible for incentives.
Which financial year serves as the base year for calculating incremental sales?
FY 2019-20 is the base year for calculating Global Manufacturing Revenue and determining pre-qualification eligibility criteria.
Can a company claim incentives under both the Pharmaceuticals PLI and Bulk Drugs PLI for the same product?
No, an applicant who has applied for or availed benefits under any other PLI scheme of the Central Government for the same product is not eligible under this scheme.
What is the timeline for submitting the bank guarantee after receiving the approval letter?
Selected applicants must submit the Bank Guarantee and Undertaking within two weeks of receiving the approval letter from the Project Management Agency.
How are incentive claims disbursed?
Claims are filed annually within one month of the financial year ending. If in order, 75% is released on approval and the remaining 25% after submission of final audited accounts by 31 December of the following year.
What products are covered under Category 1 of the scheme?
Category 1 includes biopharmaceuticals, complex generic drugs, patented drugs or drugs nearing patent expiry, cell-based or gene therapy drugs, orphan drugs, special empty capsules, complex excipients, and phyto-pharmaceuticals.
Is the cost of land counted as eligible investment under the scheme?
No, the cost of land purchased for setting up the manufacturing unit is not counted as eligible investment.
Where can applicants find the latest corrigendums and clarifications?
All corrigendums, FAQs, and clarifications issued by the Department of Pharmaceuticals are available on the official portal under the Scheme Instructions/Circulars section at https://pli-pharma.udyamimitra.in/Schemes/SchemeInstructions.