India’s approval to PLI scheme to attract Rs 22,350 cr fresh outlay!

New Delhi, February 25: In a major boost to AtmaNirbhar Bharat Abhiyaan, the central cabinet chaired by PM Narendra Modi approved PLI (Production Linked Investment) scheme to pharmaceuticals and IT hardware sectors. This approval will help attract fresh investments of around 15,000 crores in pharma and approximately 7350 crores in IT hardware sectors.

 

“Domestic pharmaceutical companies will be benefitted by this announcement. It will also help create large scale manufacturing capabilities and create global champs who will be able to penetrate international value chains. The move will enhance employment opportunities to the nearly 20,000 direct and 80,000 indirect jobs for skilled and unskilled workers. It will also help consumers get lifesaving, state of the art drugs at affordable prices”, the statement read.

 

 

According to the reports, the scheme is set to help enhance incremental sales of 2,94,000 crores and incremental exports of 1,96,000 crores till 2027-28. It will provide a major boost to Indian pharmaceutical industry which is currently ranked as the 3rd largest in the world by volume and is worth USD 40 billion in terms of value.

 

“The aim of the scheme is to develop electronics ecosystem in the country. The scheme has an employment generation potential of over 1,80,000 direct and indirect jobs. It will provide impetus to Domestic Value Addition for IT Hardware which is expected to rise to 20% - 25% by 2025”, the statement added.

 

 

 

At present, the major component of exports of Indian pharmaceutical sector are the low value generic drugs, while a large proportion of the domestic demand for patented drugs is met through imports. This is because the Indian Pharmaceutical sector lacks in high value production along with the necessary pharma R&D. This scheme will help incentivize the global and domestic players to enhance investment and production in diversified product categories, specific high value goods such as biopharmaceuticals, complex generic drugs, patented drugs or drugs nearing patent expiry and cell based or gene therapy products etc.

 

The PLI scheme was introduced by the central government in March 2020 to boost domestic manufacturing and reduce dependence on imports. The aim was to give companies incentives on incremental sales from domestic manufacture of products. The focus was also to attract foreign companies to set shop in India.

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