The Department of Pharmaceuticals, functioning under the Ministry of Chemicals and Fertilizers, is tasked with critical responsibilities related to the pricing and availability of affordable medicines, research and development, and meeting international obligations. With a vision to position India as the world’s leading provider of quality medicines at reasonable prices, the department’s efforts are deeply aligned with the Make in India initiative. The Indian pharmaceutical industry continues to hold a vital position globally, particularly in the manufacturing of high-quality, cost-effective medicines. It has earned global recognition for its dominance in branded generic medicines, competitive pricing, and a robust network of indigenous brands.
Notably, India has been UNICEF’s largest vaccine supplier for the past six to seven years, contributing 55 per cent to 60 per cent of the total volume procured. It also fulfills 99 per cent of WHO’s demand for the DPT vaccine, 52 per cent for BCG, and 45 per cent for the measles vaccine.
The medical devices sector is another essential pillar of India’s healthcare ecosystem. It plays a critical role in the prevention, diagnosis, treatment, and management of medical conditions and disabilities. This multi-disciplinary sector comprises several categories of devices such as electro-medical equipment, implants, consumables and disposables, surgical instruments, and in vitro diagnostic reagents. Many segments of this industry are highly capital-intensive with long gestation periods, requiring continuous induction of new technologies and the ongoing training of healthcare professionals to effectively use them.
India’s commitment to self-reliance and global integration is also reflected in the increasing Foreign Direct Investment (FDI) in the pharmaceutical and meditech sectors.
During the financial year 2024–25 (April to December 2024), FDI inflows in these sectors totaled Rs 11,888 crore. The Department of Pharmaceuticals approved 13 FDI proposals worth Rs 7,246.40 crore for brownfield projects during this period, reflecting growing investor confidence and policy support.
A major initiative spearheading this transformation is the Production Linked Incentive (PLI) Scheme, launched in 2020 by the Government of India. Designed to boost domestic manufacturing, attract investments, reduce import dependence, and enhance exports, the PLI Scheme aligns with the broader vision of Atmanirbhar Bharat and the Make in India program. The scheme offers financial incentives linked to production performance, encouraging companies to scale operations, adopt advanced technologies, and become more competitive globally.
Specifically, the pharmaceutical PLI scheme aims to reduce reliance on imports for Key Starting Materials (KSMs), Drug Intermediates (DIs), and Active Pharmaceutical Ingredients (APIs), thereby strengthening India’s manufacturing base.
The Department of Pharmaceuticals currently administers three PLI schemes: the PLI Scheme for Pharmaceuticals, the PLI Scheme for promotion of domestic manufacturing of critical KSMs/DIs/APIs, and the PLI Scheme for promoting domestic manufacturing of Medical Devices.
The PLI Scheme for Pharmaceuticals, approved by the Union Cabinet on February 24, 2021, has a financial outlay of Rs 15,000 crore and a production tenure from FY 2022–23 to FY 2027–28. It provides financial incentives to 55 selected applicants for manufacturing identified products under three categories for a period of six years. These include high-value pharmaceutical products such as patented/off-patented drugs, biopharmaceuticals, complex generics, anti-cancer drugs, and autoimmune drugs.
The scheme supports manufacturing under three categories:
Category 1 includes biopharmaceuticals, complex generic drugs, patented drugs or those nearing patent expiry, gene therapy drugs, orphan drugs, and complex excipients.
Category 2 includes APIs, KSMs, and DIs.
Category 3 includes repurposed drugs, autoimmune drugs, anti-cancer drugs, anti-diabetic drugs, cardiovascular drugs, and in-vitro diagnostic (IVD) devices.
The PLI Scheme for KSMs, DIs, and APIs was launched on March 20, 2020, with a financial outlay of Rs 6,940 crore for FY 2020–21 to FY 2029–30. Its primary objective is to promote the domestic manufacturing of 41 identified bulk drugs to reduce the high import dependence in this sector.
A significant milestone achieved under this scheme includes surpassing the targeted investments—while the initial commitment was Rs 3,938.57 crore, the actual realised investment as of December 2024 was Rs 4,253.92 crore. Under this scheme, 48 projects have been selected, out of which 34 have been commissioned for 25 bulk drugs.
Noteworthy projects include the Penicillin G Project in Kakinada, Andhra Pradesh, with an investment of Rs 1,910 crore, which is expected to achieve import substitution worth Rs 2,700 crore annually. Similarly, the Clavulanic Acid Project in Nalagarh, Himachal Pradesh, involves an investment of ₹450 crore, targeting an import substitution of Rs 600 crore annually.
The PLI Scheme for Medical Devices, also launched to enhance domestic production of high-end medical equipment and reduce import reliance, covers key segments such as radiology, imaging, cancer care, and implants. Spanning from FY 2020–21 to FY 2027–28, it has a financial outlay of Rs 3,420 crore. Financial incentives are offered at a rate of 5 per cent of incremental sales of medical devices manufactured in India.
Under Category A, manufacturers receive up to Rs 121 crore per applicant for the period FY 2022–23 to FY 2026–27. Under Category B, the cap is Rs 40 crore per applicant during the same period.
To further support pharmaceutical manufacturing, the government approved the Promotion of Bulk Drug Parks scheme in March 2020. This initiative, covering the period from FY 2020–21 to FY 2025–26, aims to establish parks with world-class common infrastructure to reduce manufacturing costs and improve self-reliance in bulk drugs. Proposals from Gujarat, Himachal Pradesh, and Andhra Pradesh were approved, with each park receiving financial assistance capped at Rs 1,000 crore or 70 per cent of the project cost (90 per cent for Northeastern and Hilly States), within a total financial outlay of Rs 3,000 crore.
Parallelly, the Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP) has been instrumental in making quality generic medicines accessible at affordable prices across India. This scheme focuses on educating the public about the benefits of generic medicines, dispelling myths around price and efficacy, and encouraging healthcare professionals to prescribe cost-effective alternatives. It also enhances accessibility by ensuring the availability of essential generic medicines across various therapeutic categories, especially in underserved regions. As of April 8, 2025, there are 15,479 Jan Aushadhi Kendras operating across the country.
Additionally, the Strengthening of Pharmaceuticals Industry (SPI) Scheme, a Central Sector Scheme with a total outlay of Rs 500 crore for the period from FY 2021–22 to FY 2025–26, has been implemented to support the overall pharmaceutical ecosystem, with a special focus on MSMEs.
India’s pharmaceutical and medical devices sectors serve as strong examples of the country’s growing prowess in science, innovation, and manufacturing. Through path-breaking initiatives like the PLI schemes and PMBJP, the Department of Pharmaceuticals has significantly enhanced domestic production capacities while ensuring broader public access to affordable healthcare.
As India continues to advance towards self-reliance under the Make in India vision, it is well on its way to becoming a global hub for quality, cost-effective medicines and medical technologies—empowering its citizens and contributing meaningfully to global healthcare outcomes.
