Government extends PLI to more sectors, announces Rs 15,000 crore for pharma, Rs 7350 crore for IT hardware

Centre believes PLI scheme will make India's $ 40 billion pharmaceuticals industry globally competitive and less reliant on imports for high-end patented drugs. The new incentives for domestic manufacture of IT hardware aims to raise domestic value addition to 20% - 25% by 2025 and make India a global hub for Electronics System Design and Manufacturing.

February 24, 2021 / 04:46 PM IST

Extending the Production-Linked Incentive (PLI) scheme to more sectors, the Union Cabinet on February 24 approved Rs 15,000 crore for incentives to domestic manufacturing of pharmaceuticals and Rs 7,350 crore for production of laptops, tablets, all-in-one personal computers and servers in India.

The PLI scheme is an effort to make the industry globally competitive and geared towards production of high value drugs, leveraging its position as a country which already exports low cost-pharma to more than 200 nations.

"The allocations for the scheme will be divided in 3 categories. In Group A, applicants having having Global Manufacturing Revenue (FY 2019-20) of pharmaceutical goods of Rs 5,000 crore and above. Group B will be those having revenue of Rs. 500-5000 crore, while Group C will be those having less than Rs. 500 crore revenue," Telecom Minister Ravi Shankar Prasad, said. Allocations worth Rs 11,000 crore have been earmarked for Group A, Rs 2,250 crore for Group B and Rs 1,750 crore for the relatively small players in Group C.

Total incremental sales of Rs.2,94,000 crore and total incremental exports of Rs.1,96,000 crore are estimated during six years from 2022-23 to 2027-28. The scheme is expected to generate employment for both skilled and un-skilled personnel to the tune of 1 lakh new jobs. The government also hopes to boost innovation for development of complex and high-tech products including products of emerging therapies and in-vitro Diagnostic Devices. It is also expected to improve accessibility and affordability of medical products including orphan drugs to the Indian population.

The scheme shall cover pharmaceutical goods under three categories, with the first one covering biopharmaceuticals, complex generic drugs, patented drugs or drugs nearing patent expiry, among others. The second category will cover active pharmaceutical ingredients and drug intermediates.The third category would feature repurposed drugs, auto immune drugs and anti-cancer drugs, among others, the government said on Wednesday.

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Focus on IT hardware

The PLI scheme for Information Technology hardware will run over the next 4 years and has an employment generation potential of over 1,80,000, the government said. "Currently, Rs 30,000 crore worth of laptops and Rs 3,000 crore worth of tablets are sold in India. Of this, more than 80 per cent is imported. As a result of the latest PLI scheme, the government hopes to draw into India the top 5 global companies which control 50 per cent of the international market. As a result, Rs 3,26,00 crore worth of production will be achieved, of which 75 per cent will go for exports," Prasad said.

The market for IT Hardware is dominated by 6-7 companies globally who account for about 70 per cent of the world's market share. The Centre feels that since these companies are able to exploit large economies of scale, it remains imperative that they expand their operations in India.

"We launched PLI scheme for mobile phones in April 2020, with July 31, 2020 being the date of application. Despite this being the height of the coronavirus pandemic, we got submissions from all major global companies. This has led to Rs 35,000 worth of goods being produced, 22,500 jobs being created and Rs 1300 crore worth of investments entering India," Prasad said.
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