Strengthening of Pharmaceuticals Industry Scheme

As a new MSME owner in the pharmaceutical sector, you may face challenges in upgrading your production facilities, meeting regulatory standards, and staying competitive. The Strengthening of Pharmaceutical Industry Scheme aims to address these hurdles by providing financial assistance, fostering cluster development, and encouraging innovation. This scheme is part of the government’s vision to make India a global leader in pharmaceuticals, ensuring quality, sustainability, and self-reliance for MSMEs like yours.

What is the Strengthening of Pharmaceutical Industry Scheme?

The SPI Scheme was launched on March 11, 2022, by the Department of Pharmaceuticals, Ministry of Chemicals & Fertilisers, Government of India. It brings together and upgrades earlier schemes to support MSMEs and clusters in the pharma sector, focusing on infrastructure, technology upgradation, and industry promotion.

Objectives of the SPI Scheme

• To strengthen existing infrastructure in pharma clusters, making India a global pharma leader.
• To help MSMEs upgrade production facilities to meet national and international standards.
• To promote knowledge sharing, awareness, and collaboration in the pharmaceutical and medical devices industry.

Key Features of the SPI Scheme

• The scheme supports three main components: common facilities for clusters, technology upgradation for MSMEs, and industry promotion.
• You can access financial assistance as a capital subsidy or interest subvention.
• The maturity period for loans under the technology upgradation component is a minimum of 3 years.
• The interest rate subvention is up to 5% per annum (6% for SC/ST-owned units) on eligible loans.
• The maximum loan amount eligible for benefits is ₹10 crore.
• Grants for cluster facilities can cover up to 70% of the project cost (90% for North-East and Himalayan states), with a maximum of ₹20 crore per cluster.
• The scheme is managed by a Scheme Steering Committee and implemented with the help of a Project Management Consultant.

Financial Assistance Offered Under the Scheme

1. Assistance to Pharmaceutical Industry for Common Facilities (APICF)

• Grants up to 70% of approved project cost or ₹20 crore per cluster (90% for North-East/Himalayan states).
• For the creation of common facilities like R&D labs, testing labs, effluent treatment plants, logistics, and training centres.

2. Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS)

• Interest subvention up to 5% per annum (6% for SC/ST units) on loans up to ₹10 crore for 3 years.
• Alternatively, a credit-linked capital subsidy of 10% on the eligible loan amount (up to ₹10 crore). Only new machinery and related systems for technology upgradation are eligible.

3. Pharmaceutical & Medical Devices Promotion and Development Scheme (PMPDS)

Grants for conducting studies, organising seminars, building databases, and promoting the industry. The grant under the scheme is released in three stages: 

• 30% is issued with the sanction order after executing the surety bond
• Another 30% is released upon submission of the draft report and executive summary (with presentations if required)
• The final 40% is released after submission and acceptance of the final report (10 hard copies and soft copies).

Eligibility Criteria for SPI Scheme

Eligibility

You can apply if:

• You are an MSME in the pharmaceutical sector.
• You are part of a group of at least 5 pharma units forming a Special Purpose Vehicle (SPV), registered as a legal entity.
• You are an MSME with a proven track record and have a sanctioned loan from a scheduled commercial bank.
• You represent an industry association, recognised organisation, or government agency with relevant experience.

Non-eligibility

You cannot apply if:

• You are an individual production unit seeking grants for your own facilities (for Assistance to Pharmaceutical Industry for Common Facilities).
• Your SPV members have related-party relationships.
• You seek funding for land purchase, administrative buildings, or non-essential construction.
• You have already availed benefits under another technology upgradation scheme for the same project.
• Your loan for technology upgradation is sanctioned for less than 3 years.

Documents Required for SPI Scheme

• Application form (as per prescribed format)
• Proof of MSME registration
• Project proposal with technical recommendation from a competent authority
• Financial viability report and business plan
• Proof of land availability (for cluster projects)
• Loan sanction letter (for technology upgradation)
• Shareholder agreement (for Special Purpose Vehicle)
• Bank guarantee (for technology upgradation)
• Utilisation certificate (for grant release)

How to Apply for the SPI Scheme

Step 1: Visit the online portal set up by the Project Management Consultant (PMC).

Step 2: Fill in the application form and upload all required documents.

Step 3: For cluster projects, ensure your SPV is registered and has the required members.

Step 4: Obtain technical recommendation from the relevant authority (e.g., State Pollution Control Board, National Institute of Pharmaceutical Education and Research - NIPER).

Step 5: Submit your proposal before the specified cut-off date.

Step 6: Await scrutiny and appraisal by the PMC.

Step 7: If approved, follow the instructions for fund release and project implementation.

Benefits of the SPI Scheme

• Standardisation and Quality Improvement
  You get access to better facilities and technology, helping your products meet national and international standards.
• Financial Support
  You receive substantial grants or subsidies, reducing your financial burden for upgrading facilities or adopting new technology.
• Cluster Development
  You benefit from shared resources like testing labs and training centres, which lower your operational costs and improve efficiency.
• Industry Promotion
  You gain opportunities to participate in seminars, workshops, and networking events, boosting your knowledge and market reach.

Real-World Examples of SPI Scheme

• Upgradation of MSME pharma units to WHO-GMP standards
• Establishment of common effluent treatment plants in pharma clusters
• Creation of R&D and testing centres in major pharma hubs

Related Government Support Plans with SPI Scheme

Final Words

As an MSME owner in the pharmaceutical sector, the SPI Scheme is your gateway to financial support, technological advancement, and industry growth. By taking advantage of this scheme, you can upgrade your facilities, improve product quality, and become more competitive in both domestic and international markets.