PLI Scheme for Pharma : Analysis – UPSC GS2

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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.
Conclusion:
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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