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Quote by Rohitashwa Prasad, Partner, J Sagar Associates on Cabinet Approves Production Linked Incentive Scheme for Pharmaceuticals

“The PLI scheme for the pharma sector announced by the GoI today follows on the ones announced in July 2020 for APIs, KSMs and Medical Devices. It is thus one more step towards the objective of developing self-reliance and self-sufficiency in the healthcare sector in India. On a first read of the scheme, it seems to have avoided the challenges and issues that the industry faced with the July 2020 schemes, such as, limiting eligibility on the basis of the net worth of the applicants and not extending it to brownfield projects. This scheme, with applicants and incentives divided on the basis of global manufacturing revenue, is simple and clearly objective. Having said that, the objectives of the scheme are quite expansive and ambitious, and it remains to be seen as to what extent these will be achievable. For example, there may not be a straightforward inverse correlation between the manufacturing incentives and the prices of patented drugs manufactured by big foreign players even if they start manufacturing in India. In any event, since the GoI has only recently started its PLI schemes in various sectors, one should only expect to start seeing (and evaluating) the outcomes in a couple of years”


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