PLI Scheme for Domestic Manufacturing of Medical Devices

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Key takeaways

The Government of India has extended the tenure of the PLI Scheme for Medical Devices (PLI-MD) up to FY 2035-36 using ₹2,700 crore in unallocated funds.
Originally launched in FY 2020-21, the scheme aims to cut India's high import dependency of 75-80% on advanced equipment like 3T MRI and PET-CT systems.
The revised guidelines remove mandatory minimum sales targets and offer targeted financial incentives ranging from 5% to 9% across four target segments.
Selected companies get a 3-year gestation period to establish factory lines for advanced medical technology and components like X-ray tubes and RF coils.

The Government of India has reopened applications for the PLI Scheme for Promoting Domestic Manufacturing of Medical Devices (PLI-MD).
The government has also extended the overall tenure of this financial incentive scheme up to FY 2035-36.

The PLI-MD is a key sectoral program that offers financial rewards on incremental sales of locally made medical devices and essential parts.
It aims to build strong domestic manufacturing capacity while attracting both local and global investments into India.
The Department of Pharmaceuticals under the Ministry of Chemicals and Fertilizers originally launched this scheme in FY 2020-21.
The scheme supports the Aatmanirbhar Bharat and Make in India missions by reducing heavy reliance on imported medical devices.
It focuses on creating strong local supply chains for advanced equipment like 3T MRI, PET-CT, and ultrasound systems.

Both registered Indian and international companies setting up manufacturing plants in India under the target segments can apply.
The government gives selected applicants a gestation period of 3 years to build their manufacturing units.
The revised rules remove the strict minimum sales threshold required earlier to claim financial incentives.
The government has also lowered the minimum capital investment requirements to help smaller businesses participate.

The scheme categorizes medical manufacturing into four target segments (TS) to cover different technology levels.
Target Segment 1 focuses on medical consumables, single-use disposables, and surgical implants.
Target Segment 2 covers critical components and sub-assemblies to give a direct boost to MSMEs.
Target Segment 3 supports high-end medical devices that currently have very limited manufacturing presence in India.
Target Segment 4 targets complex medical devices that companies currently only assemble inside the country.
The scheme offers a custom incentive structure based on technological difficulty.
Consumables and implants under TS 1 receive an average financial incentive of ~5%.
Critical components and early-stage high-end equipment under TS 2 and TS 3 receive an average incentive of ~9%.
Assembled high-end equipment under TS 4 receives an average financial incentive of 6%.
Removing the minimum incremental sales rule lowers entry barriers for new startups and smaller companies.
The scheme promotes complete local manufacturing of key parts like X-ray tubes, detectors, and RF coils instead of simple assembly.
The government will use about ₹2,700 crore of unallocated funds to support the extension until FY 2035-36.
This longer timeline gives companies enough time to complete long research cycles, clinical trials, and regulatory approvals.

India currently imports 75-80% of its high-end medical equipment, and local manufacturing will greatly lower this dependence.
Replacing imports strengthens national healthcare security and saves valuable foreign exchange reserves for India.
Offering ~9% incentives for core components strengthens small suppliers and advances the Aatmanirbhar Bharat vision.
Building local capacity will help Indian manufacturers scale up production and boost high-tech medical exports globally.