Under the "Strengthening the Pharmaceutical Industry" initiative, which seeks to strengthen micro, small and medium enterprises (MSMEs) in the domestic pharmaceutical sector, India announced new schemes to develop MSMEs.
These schemes intend to facilitate technology upgradation, setting up common research centers, testing labs and operating effluent treatment plants in clusters for pharmaceutical MSMEs.
The department of pharmaceuticals noted that in order to strengthen the supply chain of the pharmaceuticals industry the government will incentivise MSMEs for getting Schedule M certification or Good Manufacturing Practice (GMO) certification by the World Health Organization (WHO) through the sub-scheme Pharmaceuticals Industry Technology Upgradation Assistance Scheme (PTUAS).
GMP certification is a standard defined by WHO for ensuring products are produced and controlled as per the quality standards. MSMEs will have the option to choose from either capital subsidy or interest subvention to upgrade their production facilities as per WHO-GMP or Schedule-M standards.
The Small Industries Development Bank of India (SIDBI) – the apex regulatory body for overall licensing and regulation of MSMEs – will be the project management consultant for implementing the three schemes under SPI.
The three new schemes, announced by the Ministry of Chemicals and Fertilizers, are:
- Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS): This scheme intends to provide support for pharmaceutical MSMEs with a proven track record – to upgrade their technology. The PTUAS scheme will provide a capital subsidy of 10 percent on loans up to INR 100 million with a minimum repayment period of three years or interest subvention of up to five percent on reducing balance basis.
- Assistance to Pharma Industries for Common Facilities Scheme (API-CF): This scheme will strengthen the existing pharmaceutical clusters’ capacity for sustained growth. Under it, assistance of up to 70 percent of project cost or INR 200 million (whichever is less) will be provided. In case of the Himalayan and north-east region, the grant-in-aid would be INR 200 million per cluster or 90 percent of the project cost, whichever is less.
- Pharmaceutical and Medical Devices Promotion and Development Scheme (PMPDS): The PMPDS scheme is aimed at the creation of a database of the Indian pharmaceutical and medical device industry, along with preparation of study reports on topics of importance for the industry.
What is the objective of the SPI schemes announced for pharmaceutical MSMEs?
- Financial assistance for creation and growth of pharmaceutical clusters: Strengthening existing infrastructure and facilities to make India a global leader in the pharmaceutical sector by providing financial assistance to pharmaceutical clusters for creation of common facilities to improve their quality and ensure the sustainable growth of each cluster.
- Production facility upgradation of MSMEs: Upgrading the production facilities of SMEs and MSMEs, to meet national and international regulatory standards, by providing interest subvention or capital subsidy on their capital loans, which will facilitate the growth in volumes as well as in quality.
- Aiding research and development in the industry: Promotion of knowledge and awareness in and about the pharmaceutical and medical devices industry by taking up studies, building databases and bringing industry leaders, academia, and policy makers together to share their knowledge and experience for overall development of the industry.
The new scheme assumes importance as the domestic pharma market is expected to jump 3x this decade from $42 billion in 2021 to $65 billion by 2024 and further to around $120-130 billion by 2030, according to the Indian Economic Survey 2021.
According to IBEF, the Indian pharmaceutical sector supplies more than 50 per cent of the global demand for various vaccines. India ranks 3rd in terms of pharmaceutical production by volume and 14th by value and the domestic industry includes a network of 3,000 drug companies and around 10,500 manufacturing units.