Turmeric Man of Himachal Pradesh

In a significant boost to India's pharmaceutical industry, the country's first active pharmaceutical ingredient (API) fermentation unit at Plassra in Nalagarh, Himachal Pradesh, has commenced large-scale production. This milestone achievement is the result of efforts under the centrally-sponsored Production Linked Incentive (PLI) scheme aimed at reducing India's reliance on API imports from countries like China and Korea. The unit, which began production in the past few weeks, has already achieved up to 6.5 per cent yield in its initial phase, marking a pivotal shift towards self-sufficiency in the pharmaceutical sector.

Key Features of the API Fermentation Unit

The API fermentation unit, Kinvan Private Limited, located in the Plassara Industrial Area of Nalagarh tehsil, has been established with an investment of Rs 460 crore. It is designed to produce 400 tonnes of potassium clavulanate API annually once it reaches its full production potential. Potassium clavulanate is a key API used in the production of several antibiotics, and this unit is expected to meet approximately 60 percent of India's domestic demand for this critical raw material.

India has long been dependent on imports for APIs, primarily from China and Korea. This dependency posed significant risks, particularly during the COVID-19 pandemic, which disrupted global supply chains and highlighted the need for domestic manufacturing capacity. The PLI scheme, introduced by the Indian government, aims to promote the domestic production of critical key starting materials (KSMs), drug intermediates, and APIs, making the country more resilient to global disruptions.

Meeting Domestic Demand and Employment Opportunities

India's domestic demand for potassium clavulanate API is pegged at 700 tonnes per annum. With the Nalagarh unit expected to produce 400 tonnes annually, it will fulfill a substantial portion of this demand, reducing the need for imports. During its trial period, the unit has already begun supplying API to states like Gujarat and Uttarakhand.

The establishment of this facility has also generated employment opportunities, particularly for local residents. Out of the 309 people employed in the unit, 252 are Himachalis, providing a much-needed boost to the region's economy.

Government Support and Incentives

The state-level Single Window Clearance and Monitoring Authority approved the project in its 17th meeting on July 7, 2021, and in-principal approval for setting up the plant was granted on July 28, 2021. To encourage the development of this vital facility, the government has extended several incentives:

• 100 percent exemption on electricity duty for five years.
• 15 percent rebate on energy charges for five years.
• 100 percent exemption on stamp duty and registration fees.
• Subsidized land at a rate of Re 1 per square meter.

These incentives, along with the support of the PLI scheme, underscore the government's commitment to bolstering the domestic pharmaceutical industry and reducing dependency on imports for critical pharmaceutical components.

The Production Linked Incentive (PLI) Scheme

The PLI scheme was introduced in response to India's heavy reliance on imported APIs, which became particularly evident during the COVID-19 pandemic. The scheme was part of a broader strategy to enhance the global competitiveness of India's pharmaceutical sector, strengthen supply chains, and promote the domestic production of key raw materials. As part of its initial focus, the government identified 48 critical APIs for local manufacturing.

The API fermentation unit in Nalagarh is one of the first projects to emerge from this initiative. The unit's commencement of large-scale production is a major step towards achieving self-reliance in pharmaceutical raw materials, aligning with the broader goals of the Atmanirbhar Bharat initiative. It is expected that this facility, along with others in the pipeline, will reduce India's vulnerability to supply chain disruptions and ensure a steady supply of essential APIs for domestic pharmaceutical manufacturers.

Future Outlook

The success of the Nalagarh API fermentation unit is likely to pave the way for more such initiatives across the country. With a focus on reducing import dependency and strengthening domestic manufacturing capabilities, the Indian pharmaceutical industry is poised for significant growth in the coming years. The government's support through schemes like PLI will continue to play a critical role in ensuring the sustainability and global competitiveness of this sector.

As India's pharmaceutical industry grows, the development of domestic API production facilities will not only improve the country's self-sufficiency but also enhance its position as a global hub for pharmaceutical manufacturing. The Nalagarh API fermentation unit marks a major milestone in this journey, contributing to both the economic development of Himachal Pradesh and the broader goal of making India a global leader in the pharmaceutical sector.