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The Centre has extended the medical devices PLI scheme to 2035-36, with nearly 80% of its ₹3,420 crore allocation unused.
Why Has the Government Revised the Scheme?
The Central Government has relaxed eligibility conditions under the Production Linked Incentive (PLI) scheme for medical device manufacturers to encourage domestic production and improve utilisation of allocated funds. The decision follows consultations with industry representatives and comes as approximately ₹2,700 crore remains available for disbursement.
The Department of Pharmaceuticals has extended the scheme’s tenure from 2027-28 to 2035-36 and invited fresh applications under the revised guidelines. Applicants approved before October 31 will continue under the previous rules. The department said the changes were based on lessons from the scheme’s first phase, particularly difficulties involving eligibility and incentive claims.
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What Are the New Investment Requirements?
Manufacturers across all four categories will now receive three years to establish production facilities before entering the five-year performance period. The government has also removed minimum sales thresholds previously required to claim incentives.
Instead of demonstrating fixed incremental sales growth each year, companies must now achieve a specified percentage of annual growth over their base year.
Manufacturers with annual turnover below ₹150 crore over the preceding three years must invest ₹50 crore, while companies with higher turnover face no minimum investment requirement. There is also no minimum investment requirement for manufacturers of critical medical device components.
How Will the Revised Incentives Work?
The revised framework replaces the earlier uniform sales-based incentive structure with different rates for four manufacturing segments.
Medical consumables, disposables and implants fall under TS1, with incentives averaging approximately 5%. Critical components under TS2 and high-end medical devices with limited domestic manufacturing under TS3 will receive approximately 9%. High-end devices currently assembled in India under TS4 will attract an average incentive of 6%.
Investments under TS1 and TS3 must involve greenfield manufacturing facilities, while TS4 investments may focus on increasing domestic value-chain integration. The changes are intended to accommodate different manufacturing requirements across the industry.
How Has the Industry Responded?
The Medical Technology Association of India welcomed the changes, describing the revised framework as more practical and investor-friendly. It said the earlier phase had restrictive conditions, while the revised scheme focuses more broadly on everyday medical consumables, critical components and advanced equipment currently imported or assembled domestically.
Himanshu Baid, Managing Director of Poly Medicure, said simplifying eligibility conditions, removing minimum sales thresholds and reducing investment requirements would make the programme more accessible to existing manufacturers and new investors.
Industry representatives also welcomed the longer application window and additional time for establishing manufacturing facilities. The changes allow investors greater flexibility in deciding their level of participation.
The revised policy seeks to improve participation in the medical devices manufacturing programme and utilise the remaining allocation over the extended period. Its success will depend on industry participation, fresh investment and the ability of manufacturers to meet the revised performance requirements.
