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.
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