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Drugs Controller General of India Dr V G Somani has recently said that the Central government is all set to introduce a research-linked incentive (RLI) scheme on the lines of the production-linked incentive (PLI) scheme to boost research and development of biotech products in the country. He said that the Central government is introducing the RLI scheme to enhance the capabilities of the domestic pharmaceutical industry and help it establish itself in the global market, and the scheme will cover R&D costs for biotech products. In her budget speech in Parliament on February 1 this year, Finance Minister Nirmala Sitharaman has announced that a new programme will be launched to promote research and innovation in pharmaceuticals through centres of excellence. Of course, it is a welcome step by the government as it is clear that the government is focusing on enhancing the healthcare infrastructure of the country through these efforts. And surely, this will encourage industry to invest in research and development in specific priority areas and it will help India become a leader in pharma innovation on the global stage. It may be noted that the research oriented medicine industry in the country has been seeking the government to bring in a research-linked incentive scheme in line with the PLI scheme launched by the government for the manufacturing industry. In order to make the country self-reliant in active pharmaceutical ingredients (APIs) and drug intermediates, the Department of Pharmaceuticals had earlier announced three PLI schemes - PLI Scheme for promotion of domestic manufacturing of critical Key Starting Materials (KSMs)/Drug Intermediates and APIs in India with a financial outlay of Rs. 6,490 crore; PLI Scheme for Pharmaceuticals with a financial outlay of Rs. 15,000 crore; and the PLI Scheme for Promotion of Bulk Drug Parks with a financial outlay of Rs. 3,000 crore. The Indian government approved the PLI scheme for pharmaceutical industry for the financial period of 2020-21 to 2028-29. The major aim of the PLI scheme is to create an environment that is favourable for domestic API manufacturers.
In fact, for quite some time the Central government is seized of the seriousness of the issue of introducing the RLI scheme on the lines of PLI scheme. NITI Aayog, the policy think-tank of the government of India, has been working on the RLI scheme for the pharmaceutical industry, which would incentivise risk-taking for discovery and translation of new drugs, biologics, vaccines and other moonshot areas. To create a research-driven pharmaceutical and life-sciences ecosystem, and move up the value chain in the global pharma scene, the policy think-tank is working actively on rolling out the RLI scheme for the pharmaceutical sector. In the moonshot areas, where risk is very important, the scheme proposes to support innovation by the way of weighted tax deductions, using the production linked incentive paradigm. Of course, to support research and development in the pharmaceutical and related sectors, the government is now looking at multiple pathways. It is true that research and development in these sectors requires huge investments and schemes like RLI would help the industry to grow stronger. It will help the industry in increasing its investments into innovation and R&D. So far, the Indian pharmaceutical industry has been too cozy as an industry in not taking risks. The future requires industry to turn in the right direction by way of being discoverers of solutions, drugs and medicines and biotechnologies. The Indian pharmaceutical industry, which has grown by leaps and bounds for the last four decades, will be more than willing to take the risks. But, the government has to provide the conducive atmosphere by introducing schemes like the RLI which is now long overdue.
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