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'Pharma PLI scheme to reduce dependence on API imports'
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SME Times News Bureau | 03 Jul, 2021
India's production-linked incentive (PLI) scheme will reduce India's
dependence on imports for key active pharmaceutical ingredients (APIs)
said India Ratings and Research (Ind-Ra).
Accordingly, the rating
agency expects import dependency to reduce around 43 per cent in the
medium term from around 70 per cent currently.
"The scheme will
not only attract foreign investments, but also promote the development
of complex and high-tech products, emerging therapies and in-vitro
diagnostic devices in India."
"The benefits of the scheme will be
a function of the pace of rollout of the scheme and interest of Indian
pharmaceutical companies."
The agency opined that the scheme will
benefit API manufacturers by giving them extra push to setup the
necessary infrastructure along with their pre-planned infrastructure.
"Whereas,
the benefit to formulations manufacturers will be limited, because
compared to the industry size, the incentives are unlikely to be strong
enough for them to move up the value chain."
"Bulk drug parks
will help integrate infrastructure facilities, thereby reducing the
manufacturing cost of APIs. Ind-Ra believes, if bulk drug parks are
setup as envisaged to address infrastructure and approval issues, this
will improve the ease of doing business."
The agency believes
the PLI scheme to be a positive step in reducing India's dependence on
China, though the benefits of the scheme will be visible after five to
seven years.
"Repeated raw material supply disruptions from China
has been a cause of concern for global pharma companies including
India, due to their high dependency on China."
"MNC companies have started looking for an alternative to keep their supplies going uninterrupted."
According
to the government estimates, the scheme is expected to bring in
investment of Rs 150 billion in the domestic pharmaceutical sector.
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