Production Linked Incentive: Boon for the Medical Devices Industry in India

  • Industry News
  • Jun 05,23
India is the fourth largest medical device market in Asia. The Production Linked Incentives Scheme (PLI) Scheme for Medical Devices manufacturing proposes a financial incentive to boost domestic manufacturing boosting ‘Atma Nirbhar’ Bharat mission.
Production Linked Incentive: Boon for the Medical Devices Industry in India

India is the fourth largest medical device market in Asia. Currently, the Indian market has a high reliance on imports but in recent times the exports have seen a surge. ‘Atma Nirbhar’ Bharat mission is providing an impetus to India’s vision of becoming a global manufacturing hub for medical devices. The objective of the Scheme is to provide financial incentives to boost domestic manufacturing and attract large investments in the Medical Device Sector.

PLI Scheme for Promoting Domestic Manufacturing of Medical Devices 

The Production Linked Incentives Scheme (PLI) Scheme for Medical Devices manufacturing proposes a financial incentive to boost domestic manufacturing and at tract large investment in medical devices segments such as cancer care devices, radiology and imaging devices, Anaesthetics devices, implants etc.

  • Production Linked Incentives to the tune of Rs 3,420 crore under the Scheme
  • Approval has been granted to 21 applicants with a committed investment of Rs 1,059.33 crore
  • The scheme is set to create global champions out of India and boost the Make in India, Make for the World mandate
  • Tenure of the scheme: Financial Year 2020-21 to Financial Year 2027-28
Incentives: 5 per cent on incremental sales (over Base Year: Financial Year 2019-20) of goods manufactured in India
  
Target Segments: A broad range of product segments ranging from capital equipment, implants, and consumables

Eligibility: Subject to meeting the committed investment and minimum threshold sales

Production Linked Incentive Scheme for Pharmaceuticals (PLI 2.0)

The Production Linked Incentive Scheme aims to enhance India’s manufacturing capabilities by increasing investment and production in the pharmaceutical and medical devices sectors and contributing to product diversification to high-value goods in the sectors.

The Scheme intends to create global champions out of India who has the potential to grow and scale using cutting-edge technology and thereby penetrate the global value chains. The Scheme includes a broad range of product segments ranging from biopharmaceuticals, APIs, and in vitro medical devices.

55 Pharma Companies have qualified for the 15,000 crore PLI Scheme, giving the "Pharmacy of the World" a boost to increase investment & production of Pharmaceuticals & Medical Devices.

Tenure of the scheme: Financial Year 2020-21 to Financial Year 2028-29 

Total Financial Outlay: 15,000 crore, which has been allocated amongst three applicant groups based on revenue - Group A: Rs 11,000 crore, Group B: Rs 2,250 crore and Group C: Rs 1,750 crore.

Target Segments
• Cancer care / Radiotherapy medical devices
• Radiology& Imaging medical devices (both ionizing & non-ionizing radiation  products) and Nuclear Imaging devices
• Anaesthetics & Cardio-Respiratory medical devices including Catheters of  Cardio-Respiratory Category & Renal Care medical devices
• All Implants including implantable electronic devices

Present Status
The scheme shall extend an incentive of 4 per cent to 6 per cent on incremental sales (over base year) of goods manufactured in India and covered under target segments, to eligible companies, for a period of five years subsequent to the base year as defined, as the Department of Pharmaceuticals (DoP) revises guidelines for PLI scheme for promotion of domestic medical devices. In the previous guideline, the eligibility threshold criteria for the applicants were from Fiscal Year 2022-23 to Fiscal Year 2026- 27 with a five per cent rate of incentive on incremental sales of manufactured goods each year. The maximum incentive was Rs 121 crore during the five years. However, in the revised guideline, while the threshold criteria for Category A stand the same, the threshold criteria for Category B applicants have been added with the same rate of incentive on incremental sales of manufacturing goods applicable for each year. The category will also have a total maximum incentive of Rs 40 crore for five years.
  
PLI schemes to encourage an ‘Atmanirbhar Bharat’

The medical devices and pharmaceutical industry welcomed the move and called for more ‘Make in India’ friendly policies from the government. The PLI scheme taken by Department of Pharmaceuticals for an Atmanirbhar Bharat (self-reliant India) will have a far-reaching effect to end our 70-80 per cent import dependence, nominal tariff protection, separate medical devices law, cap on MRP linked trade margins over imports landed price/ex-factory price, preferential procurement for Indigenous products, incentivising ICMED certification and restrictions on imports of pre-owned equipment.

Article Courtesy: German Engineering Federation (VDMA)

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