The Government has launched Production Linked Incentive (PLI) schemes for 14 key sectors, marking a significant expansion of the manufacturing support initiative. As reported by the Press Information Bureau, this comprehensive approach demonstrates the government's commitment to strengthening domestic manufacturing across critical industries. The bulk drugs sector remains a key focus area within this expanded framework, with the Centre continuing its strategy of overhauling the production-linked incentive scheme for bulk drugs to support research and development, infrastructure and financing, as outlined by department of pharmaceuticals secretary Manoj Joshi.
India launched the PLI scheme for promotion of domestic manufacturing of KSMs, drug intermediates and APIs in 2021, during the COVID pandemic when quarantines and restrictions stopped operations at Chinese manufacturers. According to reports from Mint, as of March 2026, domestic manufacturing capacity has been created for 29 KSMs and APIs, resulting in cumulative sales of ₹3,270 crore, including exports of ₹521 crore, thereby avoiding imports worth ₹2,749 crore. The scheme has successfully produced penicillin G, potassium clavulanate and certain imported bulk drugs after a long time. Manoj Joshi noted that "The initial PLI scheme for bulk drugs led to production of penicillin G, potassium clavulanate and certain imported bulk drugs after a long time. There is now a need to further spur production of bulk drugs–active pharmaceutical ingredients (APIs), key starting materials (KSMs) and intermediates." The department is discussing additional support with state administrations to lower utility expenses for factories and augment research & development efforts.
India relies on imports for critical bulk drugs including penicillin G and amoxicillin for broad-spectrum antibiotics, azithromycin for respiratory and skin infections, and rifampicin for tuberculosis treatment. As reported by Mint, the country also depends on overseas suppliers for atorvastatin, a widely used bulk drug for cholesterol-lowering medications, and metformin, the primary raw material for common type-2 diabetes medication. India imported 200 categories of APIs, bulk drugs and drug intermediates worth about $4.35 billion in FY25, with China accounting for about 73.7% of these imports and the European Union as the second-largest supplier at $593.13 million for a 13.64% share. JP Nadda acknowledged that "India's reliance on imports for certain critical classes of drugs creates strategic vulnerabilities by exposing the pharmaceutical supply chain to external disruptions and geopolitical risks." Even as India's pharmaceutical industry has grown to $60 billion, the country's dependence on imports for certain critical classes of drugs remains a concern for national security.
India has 1,500 API manufacturing facilities operated by 700 companies producing 500 major APIs largely based in Hyderabad (Telangana), Ankleshwar and Vadodara (Gujarat), and Aurangabad (Maharashtra). According to Mint, Viranchi Shah, national president of the Indian Drugs Manufacturers Association representing 1,200 member-companies, noted that the PLI scheme has been a landmark initiative with successful production of para-aminophenol (used to make paracetamol), 6-aminopenicillanic acid (a compound found in penicillins), clavulanic acid (used in the treatment of certain bacterial infections) and TIOC (used to manufacture various erythromycin-based antibiotics). B R Sikri, chairman of Federation of Pharma Entrepreneurs (FOPE), said pharmaceutical MSMEs have consistently raised quality standards by strengthening compliance systems and today contribute significantly to India's pharmaceutical exports to more than 195 countries. Dr. Rajesh Gupta, All India Head of Pharma Committee, Laghu Udyog Bharti, noted that the government has remained proactive since 2015 in supporting pharmaceutical MSMEs through initiatives such as the Department of Pharmaceuticals' Revamped Pharmaceutical Technology Upgradation Assistance Scheme (RPTUAS) and the PLI scheme, helping MSMEs upgrade manufacturing facilities in line with GMP requirements and prepare for advanced global regulatory frameworks such as PIC/S.
