India’s Department of Pharmaceuticals has launched a fresh application round under the Production Linked Incentive (PLI) Scheme targeting two high-priority active pharmaceutical ingredients, Meropenem, a broad-spectrum carbapenem antibiotic, and Ritonavir, a protease inhibitor booster used in HIV therapy combinations. The move signals a strategic recalibration in the government’s efforts to reduce India’s dependence on Chinese API imports and shore up API manufacturing in India of molecules critical to hospital care and infectious disease management.
Why This Matters Now?
India currently imports three-fourths of its APIs from China, amounting to over $3.6 billion annually, with China accounting for 43.45% of India’s pharmaceutical imports in 2023–24. Antibiotics like meropenem and antiretrovirals like ritonavir fall into high-risk categories, where import dependence exceeds 90% for certain antibiotic classes. The COVID-19 pandemic exposed these vulnerabilities sharply; supply disruptions from China cascaded into production delays for Indian formulation makers and delayed access to critical medicines globally. The new PLI window addresses this structural fragility by reopening slots for these two molecules with stricter eligibility criteria, signalling the government’s determination to make the scheme viable for serious investors.
What’s Being Offered
Under this round, the government will select a total of eight applicants, four for Meropenem and four for Ritonavir. For Meropenem, each selected firm must commit to a minimum annual production capacity of 4 metric tonnes (MT), with a combined available capacity pool of 16 MT. Ritonavir applicants face a higher threshold: 5 MT per firm minimum, with a total available pool of 20 MT. Incentives and support extend through financial year 2027–28 for chemical synthesis products, with firms operating under a defined production tenure framework set by the scheme guidelines.
The application window was opened on 27 November 2025 and closes on 26 December 2025, conducted exclusively through the PLI bulk drugs online portal operated by IFCI Limited.
Updated Eligibility Rules
A critical change in this round is that the government has explicitly barred earlier PLI awardees who withdrew or had approvals cancelled for non-performance from re-applying for the same products. This eligibility gate reflects frustration with project delays, non-execution, and underutilization of allocated capacity in earlier PLI tranches. Industry observers note that while the broader PLI Scheme for Bulk Drugs has achieved ₹4,763.34 crore in actual investment over three and a half years (against a ₹4,329.95 crore commitment) and created capacities for 26 KSMs/DIs/APIs, not all initial winners have scaled production as promised. The new gate ensures capital flows only to applicants with demonstrated execution discipline and realistic capex timelines.
What This Means for the Industry
For formulation manufacturers, this round represents a rare window to lock in domestic API supply at incentivized costs for two globally critical molecules. Meropenem demand surges during infection outbreaks and sepsis episodes; Ritonavir’s role in combination antiretroviral regimens underpins treatment access for LMIC markets where India dominates generic exports. Diversifying sourcing away from China mitigates geopolitical risk and procurement volatility, especially as trade tensions persist.
For leaders of API manufacturing in India, the opportunity carries both promise and pressure. Successful applicants will access fiscal incentives and infrastructure support via bulk drug parks being developed in Andhra Pradesh, Gujarat, and Himachal Pradesh, with common facilities, effluent treatment plants, and subsidised utilities. Yet the path to profitability remains narrow: Chinese competitors enjoy entrenched cost advantages, established supply chains, and scale economies. Only firms with credible R&D, world-class manufacturing practices, and access to patient capital are likely to succeed.
What’s Next for the Industry
Applications will be evaluated on technical merit, CAPEX feasibility, timeline realism, and promoter credentials. The selection process typically concludes within 3–4 months of the closure deadline. For industry professionals, the critical watch point is which Indian API conglomerates or mid-sized players will bid aggressively, and will the incentive structure prove sufficient to attract capex commitment at the scale required.
