PLI Scheme for Pharma : Analysis – UPSC GS2

Pharmaceutical Industry in India
  • The pharmaceutical industry in India is the 3rd largest in the world in terms of volume and 14th largest in terms of value.
  • India is the largest provider of generic drugs globally.
  • Indian medicines are preferred worldwide, thereby rightly making the country the “Pharmacy of the World”.
PLI Scheme for Pharmaceuticals: 
  • Aim:
    • To enhance India’s manufacturing capabilities by increasing investment and production in the sector and contributing to product diversification to high value goods in the pharmaceutical sector.
    • To reduce import dependence on active pharmaceutical ingredients (APIs), drug intermediates (DIs) and key starting materials (KSMs).
  • Duration of the Scheme: 2020-21 to 2028-29
Ways to make Pharma Industry Self-reliant: 
  • Creating Confidence among Investors:
    • Firms will invest in production in India if they see a prospect of producing at prices cheaper than the cost of imports.
  • Reducing Import Dependence:
    • India needs a strategy to realize the objective of reducing import dependence.
    • Technology plays a very crucial role in reducing import dependence as Indian producers have constraints in overcoming some of the advantages of Chinese producers such as the scale of operations.
  • Utilizing Existing Manufacturing Facilities:
    • Many firms used to produce these products and have wound up production as cheaper imports began to flow from China.
    • Permission to utilize existing but inoperational or underutilized facilities for production would have elicited a better response.
  • Need of Industrial Policy:
    • The history of the development of the indigenous pharmaceutical industry in India shows the significance of an industrial policy that is in tandem with trade and science and technology policies.
  • Focus on Smaller Firms: 
    • The production of APIs by large firms is largely for captive consumption. The focus of the PLI Phase-I scheme, however, is on large firms.
    • It is equally important to include smaller firms that are into the KSMs/DIs/APIs business in a major way.
  • Involving Public Sector Enterprises:
    • Public sector enterprises (PSEs) should be tasked with the production of APIs and their KSMs and DIs.
    • The lead role that PSEs had played in the development of the indigenous pharmaceutical industry in India can never be forgotten.
The Government of India has recognised the importance of industries such as pharmaceuticals and medical devices to be self-reliant. And this is reflected in the production-linked incentive (PLI) schemes that have been launched under the umbrella of the Aatmanirbhar Bharat Abhiyaan.
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