With the COVID-19 pandemic hitting global supply chains, especially of medical products and devices, India is pushing to become a global manufacturing hub. The Cabinet on Friday approved incentives for setting up ‘Medical Device Parks’ and ‘Bulk Drug Parks’ across the country to boost domestic manufacturing of medical devices, key starting materials (KSM), drug intermediaries and active pharmaceutical ingredients (API).
Announcing the Cabinet’s decision, Mansukh Mandaviya, Minister of State for Shipping (independent charge) and Chemicals & Fertilisers, said India currently imports APIs worth Rs 42,000 crore, and exports worth Rs 32,000 crore. “There is a gap, because of which of which we were not able to sustain the drug security of the country,” he said, adding that 85% of medical devices are imported.
The Centre has decided to set up four ‘Medical Device Parks’ and three ‘Bulk Drug Parks’ across the country, for which it will provide incentives to states. It will give grants-in-aid to each state, up to Rs 100 crore for each ‘Medical Device Park’ and Rs 1,000 crore for each ‘Bulk Drug Park’ over the next five years.
Further, the Centre has also approved Production Linked Incentive (PLI) schemes for promoting domestic manufacturing in these sectors. The PLI will add up to Rs 6,940 crore for critical KSMs, drug intermediates and APIs over the next eight years, and Rs 3,420 crore for medical devices over the next five years.
The government said the medical device sector “suffers from a cost of manufacturing disability of around 12-15%, vis-a-vis competing economies”, due to lack of adequate infrastructure and domestic supply chain among other factors, and so it needs to be compensated.
The government has estimated that the push will lead to incremental sales of Rs 46,400 crore in the KSM, API sector over the next eight years, and Rs 68,437 crore in medical devices over five years.
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