PLI Scheme for Manufacturing Medical Devices in India

The Production Linked Incentives (PLI) Scheme for Medical Devices aims to provide financial incentives in order to stimulate domestic manufacturing and encourage significant investments in various segments of the medical devices industry. These segments include cancer care devices, radiology and imaging devices, anaesthesia devices, implants, and more. The scheme intends to boost the production capacity and competitiveness of the Indian medical devices sector by attracting both domestic and international investments.

The medical device sector in India is the 4th largest in Asia & among the top 30 in the world. The PLI scheme for medical devices aims to enhance the domestic manufacturing industry by providing financial incentives to manufacturers. It is anticipated that this initiative will stimulate job creation, foster innovation, and promote research and development within the medical devices sector.

Some Key Features of the Scheme

• In order to boost domestic manufacturing and attract large investments in the industry. The PLI scheme has a total outlay of about INR 3,420 Cr. for the medical device sector.
• The scheme for covers a wide variety of products, including diagnostic imaging devices, radiation therapy equipment, orthopaedic implants, and more.

Calculation of Incentives

• Under the PLI Scheme for Medical Devices manufacturing, a 5% incentive will be granted on the increased sales of medical devices manufactured within India, compared to the base year of FY 2019-20. These incentives will be available for a duration of 5 years, spanning from FY 2020-21 to FY 2025-26.

Eligibility

• To qualify for incentives under the PLI Scheme for Medical Devices manufacturing, eligible companies must be registered in India and engaged in the manufacturing of the specified target segments. Additionally, the net worth of the applicant company, including that of its Group Companies, should exceed Rs. 18 crores. Meeting these criteria makes companies eligible to avail the incentives provided by the scheme.
• The PLI scheme is specifically designed for "greenfield projects" only. A greenfield project is referred to the proposal by the applicant to invest in a new manufacturing facility or a new plant within the existing manufacturing facility or plant as part of the programme.
• It is essential that the company has not been declared bankrupt, defaulter, or reported as involved in fraudulent activities by any financial institution. This requirement ensures that companies with a reliable financial track record are considered for the scheme's benefits.

Overall Challenges

While the Production Linked Incentive (PLI) scheme for medical devices is designed to encourage domestic manufacturing and provide financial incentives to eligible companies, there are also certain challenges involved for recipients of the incentives under this scheme.

• Being a recipient, certain percentage of the components used in the device must be sourced domestically, within India. This can be a challenge for some if the required components are not easily available locally or if they are more expensive than the imported ones.
• Recipients are required to invest in new plant and machinery or expand existing facilities to manufacture medical devices as part of the scheme. Companies need to be prepared for a substantial financial commitment, as they must ensure they have adequate funds to meet the stipulated requirements.
• As a recipient, it is crucial to adhere to all pertinent laws and regulations, including those pertaining to quality standards, safety measures, and environmental impact. Compliance with these regulations is essential to ensure adherence to legal and ethical standards.
• The PLI scheme for medical devices is a competitive process, and not all applications may be approved. Companies should be prepared for competition from other manufacturers and should ensure that their application is complete, accurate, and meets all the eligibility criteria.

The PLI scheme for medical devices is a positive step towards promoting the domestic medical device industry and achieving self-sufficiency in this critical sector. Firms that may be eligible to receive incentives as per the scheme should carefully consider the challenges too and ensure that they have the necessary resources and expertise to meet the eligibility criteria and comply with the regulations.


To learn more about how to pitch for the PLI scheme, the process of application, disbursement of incentives, the key obligations of the recipient CLICK HERE.