Department of Pharma proposes Rs 10,000-crore incentive scheme for promoting domestic API units

New Delhi: The Department of Pharmaceuticals (DoP) has proposed an incentive scheme of about Rs 10,000 crore for strengthening the domestic active pharmaceutical ingredients (APIs) units to boost domestic manufacturing in India to counter dwindling Chinese supply because of the coronavirus outbreak.

The proposal is likely to be put before the union cabinet tomorrow, people in the know told ET. Under the proposal, the government will provide financial incentive to those pharma companies ready to invest Rs 500 crore in an existing or new plant.

Earlier this week, the DoP had given a presentation on the scheme to the Prime Minister Office (PMO) detailing the outlines of the scheme. The department has also got an approval from the Expenditure Finance Committee for the proposed scheme, people quoted above said.


The government has been contemplating ways to encourage domestic manufacturing of APIs to counter a potential shortage of bulk drugs and intermediates ever since the coronavirus started spreading.

The DoP sources said a suitable ecosystem with focus on fiscal and procedural support to pharma companies is being considered.

“The broader vision is to make India self-sufficient as it was before the companies shifted to China,” added an official. The DoP has formulated the scheme in consultation with government think tank Niti Aayog.