India Pharma Outlook Team | Tuesday, 03 March 2026
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India has reopened the Pharma PLI scheme, giving drug makers another shot at government incentives to ramp up domestic production of critical bulk drugs.
The move comes as the government looks to cut import dependence and strengthen the country’s supply chain for essential medicines.
The decision was announced by the Department of Pharmaceuticals, which has reopened the application window under the Production Linked Incentive program for select bulk drug categories. Companies can now apply again to manufacture key active pharmaceutical ingredients, including Meropenem and Ritonavir, two widely used hospital drugs.
“PLI support is a game-changer for Indian bulk drug makers. It will help scale up production and strengthen supply chains,” said Suresh Subramanian, National Life Sciences Leader at EY Parthenon.
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Industry demand pushed the government to take this step. Several companies had earlier sought more time and flexibility to participate in the incentive program. By reopening the window, officials aim to attract fresh investment and bring more manufacturers on board.
The Pharma PLI scheme offers financial incentives to companies that meet specific production and sales targets. The goal is simple: increase domestic output of critical APIs and reduce reliance on imports, especially from countries that dominate the global bulk drug market. In recent years, supply chain shocks exposed how vulnerable the system could be when overseas shipments slowed or stopped.
Anay Shukla, Founding Partner at Arogya Legal, noted that the scheme is drawing real money into the sector. “After the initial hesitation, there’s clear industry interest. Companies are hopeful incentives will materialise and help expand production.”
Meropenem is a powerful antibiotic used to treat severe infections in hospitals. Ritonavir plays a key role in antiviral treatments, including HIV therapy. Boosting local production of these drugs is seen as a strategic move to secure uninterrupted access for patients across India and global markets that rely on Indian exports.
• Total outlay of the bulk drug PLI scheme stands at INR 6,940 crore
• India has avoided pharma imports worth over INR 1,362 crore through domestic production of 25 priority APIs, intermediates, and key starting materials
• Industry investment has crossed INR4,570 crore, exceeding initial approved commitments
• Cumulative sales under the scheme have reached around INR 1,817 crore, including INR 455 crore in exports
• Domestic manufacturing capacity has been created for 25–26 critical bulk drugs and intermediates
• India currently imports nearly 65–70% of its bulk drug requirements, highlighting the need for stronger local API production
• India ranks as the 3rd largest pharmaceutical producer by volume globally and supplies over 20% of the world’s generic medicines
These figures show the financial scale, import substitution impact, and growing manufacturing strength under the Pharma PLI scheme.
The reopening of the Pharma PLI scheme also signals that the government is willing to adjust its policies based on industry feedback. Officials expect new investments, expanded manufacturing capacity, and job creation as more firms participate.
With healthcare demand rising and global markets shifting, India is doubling down on its ambition to become a reliable hub for bulk drug production. The refreshed push under the incentive program is designed to keep that momentum strong and ensure that essential medicines remain within reach.
