Indian Drugmakers Can Now Avail Twice The Incentive For Manufacturing Upgrades

Indian pharmaceutical companies can now avail twice the incentives for upgrading their manufacturing facilities. Department of Pharmaceuticals has raised financial incentive cap for manufacturing upgrades to Rs 2 crore from Rs 1 crore earlier. However, eligibility for these incentives will remain subject to the annual turnover of the companies.

According to a notification by the Department of Pharmaceuticals dated Sept. 17, companies with an annual turnover between Rs 1 crore and Rs 50 crore will be funded for 20% of investments made for upgradation. Firms with revenue between Rs 50 crore and Rs 250 crore can avail amount equal to 15% of their investments made in eligible activities.

Meanwhile, drugmakers with turnover Rs 250 crore to Rs 500 crore will get paid for 10% of their total investments made for the upgradation of plant.

The fresh guidelines also specified criteria for expenditure to be considered for calculating the incentive amount. These include expenses towards upgrading utilities, cleaning of room facility, testing labs, stability chamber, production equipment, effluent treatment and waste management, and other consultation or certification expenses.

"Pharma units will apply online in the prescribed proforma for shortlisting under the scheme with a gap analysis of the existing manufacturing unit," the notice said. "The SSC will consider the recommendation of the PMC regarding the subsidy amount for each applicant and 50% of the eligible amount (up to Rs 1 crore within 30 days of obtaining the requisite documents."

Meanwhile, the second and the final instalment of the subsidy will also be approved within a month of obtaining these documents.

The new guidelines under the Strengthening of Pharmaceuticals scheme modifies the Revamped Pharmaceutical Technology Upgradation Assistance Scheme (RPTUAS).

"Pursuant to the deliberations held with the industry representatives and after examination of the representations received in this regard, the sub-scheme RPTUAS has been further modified,” the department’s notification to Small Industries Development Bank of India said.

The move is made at a time when there is high impetus on making Indian drug manufacturing plants comply with good manufacturing practices. The government had also released revised Schedule M last year, which makes it mandatory for all the pharmaceutical companies to follow GMP standards recommended by World Health Organization.

Companies with revenue of more than Rs 250 crore were given a timeline of six month to comply with GMP norms, while companies with revenue less than Rs 250 crore should take not more than 12 months, as per the revised Schedule M.