How India is rebuilding API production — and what Pakistan can learn
India’s bulk-drug incentive scheme has attracted Rs5,210 crore and is commissioning plants for penicillin G, clavulanic acid and paracetamol’s raw material.
Pakistan is not alone in wanting to make more of its own active ingredients. In 2020, India launched a scheme to build domestic production of key starting materials, intermediates and APIs and reduce its import dependence.
The scheme
India’s Production Linked Incentive (PLI) scheme for bulk drugs, approved in 2020 with an outlay of ₹6,940 crore, links incentives to local production of key starting materials (KSMs), intermediates and APIs.
Results so far
| Measure (to June 2026) | Figure |
|---|---|
| Investment | ₹5,210.74 crore |
| Projects being commissioned | 39, for 28 APIs/KSMs |
| Sales | ₹3,792.49 crore, incl. ₹560.16 crore exports |
| Jobs | 5,127 |
The projects include penicillin G (15,000 tonnes a year at Kakinada), clavulanic acid (400 tonnes a year), para-aminophenol — the raw material for paracetamol — (13,500 tonnes a year) and atorvastatin, India’s Department of Pharmaceuticals said in September 2026. By March 2025, the scheme had already saved ₹1,362 crore of imports, and three bulk drug parks are being developed.
Lessons for Pakistan
- Target specific molecules: India focused on critical, high-volume inputs rather than everything at once.
- Link support to production: as the scheme’s name says, incentives follow output rather than plans.
- Build clusters: India is developing three dedicated bulk drug parks alongside the incentive scheme.
An IPRI policy paper published in December 2025 proposed a mid-term goal of 20–30% API localisation for Pakistan and 5–10 year tax exemptions for API production.
What to watch
Even with incentives, the first projects took years. Pakistan’s localisation will need patient capital and partners — see why Pakistan imports almost 90% of its APIs. API makers and importers exhibit at Pharma Asia 2026.
Sources
- The Pioneer, “Rs 5,210 crore invested under bulk drugs PLI till June: Govt”, 26 September 2026
- IndiaMedToday, “India cuts pharma import bill by ₹1,362 crore under bulk drug PLI scheme”, 23 July 2025
- Islamabad Policy Research Institute, policy paper on Pakistan’s pharmaceutical sector (Dr Aneel Salman and Sheraz Ahmad Choudhary), December 2025
