API unitsThe Department of Pharmaceuticals (DoP) has proposed the creation of Rs 3,000 crore corpus for companies to set up fermentation or active pharmaceutical ingredients (APIs) units to boost domestic manufacturing in India.

Under the proposal, the government will provide financial incentive to those pharma companies ready to invest Rs 500 crore in an existing or new plant. The proposal is likely to be put before the Union Cabinet on 20 March 2020.

DoP had given a presentation on the scheme to the Prime Minister Office detailing outlines of the scheme. The department has also got an approval from the Expenditure Finance Committee for the proposed scheme.

The government has been finding ways to encourage domestic manufacturing of APIs to counter a potential shortage of bulk drugs and intermediates.

DoP has formulated the scheme in consultation with Niti Aayog, incorporating recommendations of the technical committee that DoP formed in February 2020 to look into the revival of fermentation industry, new technologies for manufacturing of APIs, costing of projects and identification of strategic business models.

As part of the plans to reduce dependence on China for bulk drugs or APIs, and give impetus to domestic industry, the Ministry of Environment, Forest and Climate Change (MoEF&CC) is also contemplating putting bulk drug manufacturing units in B2 category as they will not be required to submit an environment impact assessment (EIA) report.

The move is expected to reduce significant time taken to get approvals for starting bulk drug units in India.

If the project falls in B category, it goes to state governments for clearance, which has further categorised it into B1 and B2 projects. B2 projects do not require preparation of EIA reports.


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