DoP's Rs 7,000 Cr Bulk Drug PLI Scheme: What's Changing?

The bulk drug PLI scheme is set for a proposed Rs 7,000 crore revamp as the Department of Pharmaceuticals looks to address India's domestic pharmaceutical manufacturing challenges.

The proposed program follows the underwhelming production and incentive disbursement performance of the existing Rs 6,940 crore scheme, despite manufacturers reporting significant investments.

By June 2026, investments from the previous scheme had reached Rs 5,210.74 crore, while production stood at Rs 3,270 crore against a lifecycle target of Rs 37,378 crore.

The revised framework is expected to introduce platform-based incentives, support brownfield manufacturing facilities and strengthen research capabilities to improve India's bulk drug production ecosystem.

Why Did India's Previous Bulk Drug PLI Scheme Fall Short?

The bulk drug PLI scheme is being reconsidered as the Department of Pharmaceuticals (DoP) prepares a proposed Rs 7,000 crore program to strengthen domestic pharmaceutical manufacturing.

The proposed framework follows gaps in the existing Rs 6,940 crore scheme, which attracted investments but struggled to translate them into production and incentive disbursements.

The performance gap points to several structural challenges:

• Chinese price competition: Domestic manufacturers face pricing pressure from Chinese suppliers, particularly when newly commissioned Indian facilities enter commercial production.
• High input costs: Expensive utilities and raw materials affect the commercial viability of domestic production.
• Limited value-chain integration: Gaps in intermediate manufacturing restrict the competitiveness of Indian API producers.

Also Read: How Data-Driven Pharma Strategy Can Accelerate Sustainable Growth

How Will the New Rs 7,000 Crore Bulk Drug PLI Scheme Change?

The proposed program will shift from product-specific incentives towards a platform-based manufacturing model.

Its major provisions include:

• Rs 5,000 crore: Proposed production incentives.
• Rs 2,000 crore: Research and development, common infrastructure and capital subsidies.
• Rs 500 crore: Dedicated R&D allocation.
• 52 manufacturing platforms: Covering more than 300 intermediates and downstream active pharmaceutical ingredients (APIs).

The proposed framework will classify products into intermediates, advanced intermediates and APIs, potentially allowing manufacturers to access incentives across a wider section of the pharmaceutical value chain.

Another significant change is the proposed inclusion of brownfield projects.

The new framework may also provide an eight-year expenditure window, six years of individual production incentives and flexibility to designate two years as zero-production years.

Can R&D Support Improve India's Bulk Drug Manufacturing Competitiveness?

The Rs 500 crore R&D allocation could support:

• Fermentation technology and strain development.
• Biocatalysis and enzyme engineering.
• Continuous-flow chemistry and equipment.
• Retrofitting existing manufacturing facilities.

Union Pharmaceutical Secretary Manoj Joshi had earlier indicated that the government was working on a broader framework emphasizing long-term capacity creation, R&D and industry-academia partnerships.