India’s pharmaceutical sector is undergoing a structural shift as the government intensifies its focus on reducing import dependency for Active Pharmaceutical Ingredients (APIs), Key Starting Materials (KSMs), and Drug Intermediates (DIs). As per the latest update released on March 13, 2026 by the Press Information Bureau (PIB), the Production Linked Incentive (PLI) Scheme for Bulk Drugs will not be extended beyond its approved tenure, reinforcing a disciplined and performance-driven policy framework.
The government clarified that extending the scheme could create an imbalance by benefiting non-performing applicants, while disadvantaging companies that adhered to timelines. This approach ensures accountability and promotes efficient execution of large-scale manufacturing projects.
Driving Self-Reliance in API Production
The PLI Scheme for Bulk Drugs, launched in July 21, 2020, was introduced with an outlay of ₹6,940 crore to boost domestic manufacturing of 41 critical bulk drugs that were largely import-dependent. The initiative is a key pillar in India’s strategy to build a resilient and self-sufficient pharmaceutical supply chain.
As of December 31, 2025, 38 projects covering 28 products have been commissioned under the scheme. These projects have created a domestic production capacity of around 56,800 metric tonnes per annum, significantly reducing reliance on imports and strengthening local manufacturing capabilities.
In Maharashtra, three projects have been approved under the scheme, attracting investments worth ₹159 crore and generating approximately 17,680 metric tonnes per annum of API manufacturing capacity.
Expanding Biopharma Capabilities
Beyond traditional APIs, the government is also investing in advanced therapeutics through the Biopharma SHAKTI scheme, announced on August 17, 2023, with a total allocation of ₹10,000 crore over five years. The scheme aims to enhance domestic capabilities in biologics and biosimilars.
This initiative is expected to improve accessibility to advanced treatments while positioning India as a global hub for biopharmaceutical innovation and manufacturing.
Strengthening Pharma and MedTech Innovation
To accelerate innovation, the government launched the Promotion of Research and Innovation in Pharma MedTech (PRIP) scheme on September 26, 2023, with a financial outlay of ₹5,000 crore. This includes ₹700 crore for establishing Centres of Excellence across seven National Institutes of Pharmaceutical Education and Research (NIPERs), along with ₹4,200 crore to support research and development investments.
The scheme is designed to foster innovation in drug discovery, medical devices, and next-generation healthcare technologies, enhancing India’s competitiveness in the global market.
Building a Robust Chemical Ecosystem
Supporting pharmaceutical manufacturing at a foundational level, the Department of Science and Technology has been advancing the Therapeutic Chemicals program since October 05, 2021, with the development of five major clusters across India. These include Chennai–Tirupati–Bengaluru, Hyderabad, Mumbai–Pune, Dehradun–Himachal, and Kolkata–Guwahati.
These clusters aim to enable collaboration between industry, academia, and research institutions, facilitating the identification and commercialization of critical chemicals required for pharmaceutical production.
Outlook
India’s policy direction reflects a comprehensive approach toward strengthening its pharmaceutical ecosystem. By focusing on domestic API production, biopharma innovation, and R&D advancement, the government is addressing long-standing supply chain vulnerabilities.
The decision announced on March 13, 2026, to maintain the original timeline of the PLI scheme underscores a commitment to efficiency and accountability, while parallel initiatives ensure sustained growth. As a result, India is well-positioned to enhance its global standing as a reliable and competitive pharmaceutical manufacturing hub.
