India Extends Medical Device PLI Scheme to 2036

India’s medical device manufacturing ambitions are entering a new phase as the center extends the Production Linked Incentive (PLI) Scheme until 2035–36 and invites fresh applications.

The eight-year extension offers manufacturers a longer investment horizon, while relaxed eligibility conditions could make incentives more accessible to existing players and new investors.

However, the bigger opportunity lies beyond expanding assembly operations.

With a stronger emphasis on critical components and advanced medical equipment, the revised framework aims to deepen domestic production, strengthen indigenous supply chains and reduce import dependence. The challenge now is to translate policy support into manufacturing capabilities across the medical technology value chain.

Medical Device PLI Scheme Gets Longer Investment Runway

The Department of Pharmaceuticals has extended the Medical Device PLI Scheme and simplified its eligibility requirements following lessons from the first phase. The revised framework offers companies greater flexibility to plan investments and establish manufacturing facilities.

According to the government, the scheme retains approximately Rs 2,700 crore in available outlay and introduces several investor-friendly changes:

• Lower entry barriers: The government has discontinued the minimum sales threshold for claiming incentives and reduced the minimum investment requirement.
• Longer manufacturing timeline: Applicants now have three years to establish facilities across the scheme’s four target segments.
• Flexible applications: Companies can apply across multiple segments, while the application window will remain open continuously for an extended period.

These changes could encourage wider participation and help manufacturers plan capacity expansion, technology investments and production timelines with greater certainty.

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India Looks Beyond Assembly to Local Component Manufacturing

The revised medical device PLI scheme places greater emphasis on critical components and high-end equipment, reflecting India's ambition to move beyond basic assembly towards deeper manufacturing.

The four target segments cover medical consumables, disposables and implants, critical components, advanced devices with limited domestic manufacturing, and high-end equipment that companies currently assemble locally.

The incentive structure also differentiates between manufacturing segments:

• TS1 receives an average tapering incentive of 5%.
• TS2 and TS3 receive approximately 9%.
• TS4 receives 6%.

The government prioritizes value-chain integration in advanced equipment segments to improve competitiveness and product quality. Incentives for critical components could also create opportunities for MSMEs and strengthen domestic supply networks.

The first phase has already supported production worth over Rs 16,000 crore and domestic manufacturing of more than 60 high-end devices and components, according to the Department of Pharmaceuticals.