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Medical device cos ask DoP to reduce threshold investment limit to Rs. 75 to 90 crore from Rs. 180 crore under PLI Scheme

Shardul Nautiyal, Mumbai
Friday, October 30, 2020, 08:00 Hrs  [IST]

Medical device manufacturers have urged the Department of Pharmaceuticals (DoP) to consider reducing threshold investment limit in range of Rs. 75 to Rs. 90 crore from Rs. 180 crore for domestic manufacturers in the Production Linked Incentive (PLI) Scheme for promoting domestic manufacturing of medical devices.

This, according to the Association of Indian Medical Device Industry (AiMeD), will also widen the scope of eligibility to cover COVID-19 utility medical devices.

The Government of India through its flagship “Make in India” initiative relied heavily on the Indian manufacturers to meet the rising demand of essential healthcare equipment for the country pushing the Indian medical devices sector to become self-reliant especially for essential 39 COVID-19 medical devices.

DoP had notified PLI Scheme for promoting domestic manufacturing of medical devices through a gazette notification dated July 21, 2020. Total financial outlay of the Scheme is Rs. 3,420 crore.

According to Rajiv Nath, Forum Coordinator, AiMeD, “The threshold investment limit of Rs. 180 crore over 3 years is palatable for those manufacturers with turnovers of over Rs. 800 to Rs. 1,000 crore which hardly anyone can bear. That is why, we have sought DoP to consider reducing this in the range of Rs. 75 crore to Rs. 90 crore for domestic manufacturers.

As per the PLI Scheme for medical devices, the incentive per company will be applicable on incremental sales of manufactured goods over base year subject to ceilings as decided by the empowered committee (EC). This has been done to address disability in manufacturing of medical devices in India vis-à-vis other major manufacturing economies.

AiMeD has worked with Quality Council of India (QCI) to expedite finalization of Indian Certification for Medical Devices (ICMED) Scheme Plus Certification as well as with consultants consortium to provide online training on quality management system (QMS) certification to new entrepreneurs who had ventured into medical devices manufacturing towards capacity building to meet QCIs ICMED certification and regulatory compliance so that they could develop confidence to seek global certification of CE and US FDA compliance for enabling global competitiveness.

Under the PLI scheme, financial incentives shall be given to selected companies based on threshold investment and incremental sales (over Base Year) of medical devices covered under target segments.
Under the Scheme, financial incentive shall be given to selected companies at the rate of 5% of incremental sales (over Base Year) of goods manufactured in India and covered under Target segments, for a period of five years i.e. from FY 2021-22 to FY 2025-26.

The PLI scheme, however, is applicable only for greenfield projects. Financial incentive under the scheme shall be provided only to companies engaged in manufacturing of goods covered under target segments in India.

Eligibility shall be subject to thresholds of investment and incremental sales of manufactured goods (covered under Target Segments) over Base Year. An applicant must meet all the threshold conditions to be eligible for disbursement of incentive. Eligibility under Production Linked Incentive scheme shall not affect eligibility under any other Scheme and vice-versa. The tenure of the scheme is from FY 2020-21 to FY 2026-27.

The application window for receiving the applications shall be 120 days. Financial Year 2019-20 shall be treated as the base year for computation of incremental sales of manufactured goods.

Assessment of threshold investment and incremental sales of manufactured goods shall be based on details furnished to the departments/ministries/agencies and statutory auditor certificates. Application under the Scheme can be made by any company registered in India.


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