With the view to make India a manufacturing hub, the government recently announced the PLI scheme for mobile phones, pharma products and medical equipment sectors.In a move to encourage self-reliant India, the Centre has approved a production linked incentive scheme (PLI) for the pharmaceutical and IT Hardware (laptop, mobile, PC) sector announced in the Union Budget 2021. As per the industry leaders it is expected to improve capital investment & reduce import dependency
Cabinet announced Rs 15,000 crore for pharma over nine years and it is expected to make India’s $40 billion pharmaceuticals industry globally competitive and less reliant on imports for high-end patented drugs.
Kedar Upadhye, President & Global CFO, Cipla one of the largest pharmaceutical companies shared that the PLI scheme will help the pharmaceutical industry become more self-reliant, standing true to its potential of being the “Pharmacy of the World”. This move will enable pharma companies to look at innovations from a different lens to play a more meaningful role in the global healthcare ecosystem.
“The scheme provides the required impetus to boost domestic production thereby reducing import dependency. It will help improve the access and affordability of critical drugs for patients across the country,” he added.
“It would go a long way in making this sector a truly global one in terms of size and stature by paving the way for a marked shift from commodity generics into a true technology-heavy industry dealing with latest technologies for patented products across various frontiers of science,” explained Ramesh Swaminathan, CFO and Head Corporate Affairs, Lupin, a pharmaceutical major in India.
It is estimated that in the next six years from 2022 to 2028 the total incremental sales of Rs 2,94,000 crore and total incremental exports of Rs 1,96,000 crore through this PLI scheme for pharma.~
Amit Jain, CFO, La Renon shared that the ultimate thrust should be on both- reducing import dependency and improving capital investment to generate jobs and hence such policies should cover maximum KSM and APIs, he added. They are looking to acquire some R&D based API unit as the prescribed KSMs and APIs does not fall under their relevance.
However, “Any incentive to boost domestic manufacturing is perceived as a positive measure. This will definitely improve capital investment in the pharmaceutical sector,” he said.
The PLI scheme for pharma is expected to generate employment for both skilled and unskilled personnel, estimated at 20,000 direct and 80,000 indirect jobs as a result of growth in the sector. The scheme covers pharmaceutical goods under three broad categories. Biopharmaceuticals, complex generic drugs, patented drugs or drugs nearing patent expiry and so on. The second category covers active pharmaceutical ingredients (APIs), KSM and drug intermediates. The third category umbrellas autoimmune drugs, anti-cancer drugs, among others, as per the official release.
PLI for Laptop, Mobile, PC manufacturers
The total cost of the proposed scheme for IT hardware is around Rs 7,350 crore over four years, which includes an incentive outlay of Rs 7,325 crore and administrative charges of Rs 25 crore, said the government.
The new incentives for domestic manufacture of IT hardware aim to raise domestic value addition to 20% – 25% by 2025 and make India a global hub for Electronics System Design and Manufacturing.
For the IT hardware, such as mobile, laptops sectors, it will bring additional investments of Rs 2,700 crore, and earn direct and indirect revenue of around Rs 15,760 crore and create 1.80 lakh jobs in a matter of four years.~
The scheme is likely to benefit five major global players and 10 domestic champions in the field of IT Hardware manufacturing including Laptops, Tablets, All-in-One PCs, and Servers. This is an important segment to promote manufacturing under ‘Atma Nirbhar Bharat’ as there is huge import reliance for these items at present.
This scheme will contribute to product diversification to high-value goods and increase global competitiveness. The scheme provides for a greater thrust on innovation, development of complex and high tech products including emerging technologies. “This would help us to play to our strengths of a young, well-educated workforce harnessing cutting edge technologies for the progress of mankind as well as the country. We eagerly await finer details of the scheme,” said Swaminathan.