Department of Pharmaceuticals (DoP) has announced the fifth round of applications under the Production Linked Incentive (PLI) scheme for bulk drugs. This initiative aims to support the domestic manufacturing of critical active pharmaceutical ingredients (APIs), key starting materials (KSMs), and drug intermediates (DIs) that remain largely dependent on imports, especially from China.

Under the latest phase, a total of 11 bulk drug products—six fermentation-based and five chemical synthesis-based—have been earmarked for production incentives. The DoP will select up to 25 eligible manufacturers through this round to fill gaps for products that were previously unsubscribed or partially subscribed in earlier rounds.

Focus Areas and Capacities

The fermentation-based products include:

• Erythromycin Thiocyanate (TIOC) – 2 applicants for a combined production capacity of 1,600 MT
• Neomycin – 2 applicants for 160 MT
• Gentamicin – 2 applicants for 80 MT
• Clindamycin – 2 applicants for 120 MT
• Streptomycin – 2 applicants for 100 MT
• Tetracycline – 2 applicants for 400 MT

Chemical synthesis-based products include:

• 2-Methyl (5) Nitro Imidazole (2MNI) – 4 applicants for 3,200 MT
• Dicyandiamide (DCDA) – 3 applicants for 24,000 MT
• Ciprofloxacin – 4 applicants for 600 MT
• Diclofenac Sodium – 1 applicant for 175 MT
• 1,1 Cyclohexane Diacetic Acid (CDA) – 1 applicant for 1,500 MT

Application Submission & Deadlines 

Applications are open from May 15 to June 14, 2025, and must be submitted online. The scheme stipulates strict compliance with annual production capacity thresholds and adherence to incentive ceilings. Incentives will be available up to FY 2027-28 for chemical synthesis products and FY 2028-29 for fermentation-based products.

Eligibility & Compliance

Entities that withdrew from the scheme earlier or had their approvals revoked due to non-performance are not eligible to reapply for the same products. This is intended to ensure accountability and focus on serious manufacturers ready to scale production rapidly.

Industry Impact and Progress So Far

Since the launch of the PLI scheme for bulk drugs in March 2020, the DoP has received 249 applications, out of which 48 have been approved. As of December 2024, 34 projects have already been commissioned, contributing to the production of 25 critical bulk drugs.

Total investments have exceeded expectations, reaching Rs. 4,253.92 crore, surpassing the initial commitment of Rs. 3,938.57 crore. Landmark projects include the Penicillin G facility in Andhra Pradesh (Rs. 1,910 crore investment) and the Clavulanic Acid plant in Himachal Pradesh (Rs. 450 crore investment), both poised to reduce annual import bills substantially.

In terms of impact, the scheme has already generated Rs. 1,556.04 crore in sales, including Rs. 412.42 crore from exports, and created over 4,470 jobs. Projections estimate a total of 9,600 jobs to be generated by the scheme’s completion.

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A Step Towards Reducing Import Dependence

India’s pharmaceutical sector has long relied on imports for APIs, with China accounting for nearly 72% of bulk drug imports by value in FY 2023-24. This over-reliance has raised concerns about supply chain vulnerabilities. The government’s strategic interventions—including the PLI scheme, revamped PTUAS, and the development of bulk drug parks—are designed to address this structural weakness.

The PLI scheme for bulk drugs operates with a total financial outlay of Rs. 6,940 crore (FY21–FY30) and complements a broader Rs. 15,000 crore PLI scheme focused on finished formulations and advanced pharma manufacturing.

Looking Ahead

With 14 more projects currently under construction and expected to be commissioned by FY 2025-26, the government anticipates increased domestic output and a higher incentive disbursement in the coming years. So far, only Rs. 20.32 crore in incentives have been disbursed, reflecting the gradual but consistent ramp-up needed to meet quality and stability benchmarks.

The renewed invitation for applications marks a pivotal opportunity for industry stakeholders to contribute towards India’s pharmaceutical sovereignty and tap into the incentive-driven growth ecosystem.

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