(MENAFN- Live Mint)

India, the world's pharmacy for low-cost generics, is attempting a major upgrade.

The Department of Pharmaceuticals has opened applications for the ₹5,000 crore program aimed at funding research and development (R&D) in the pharma and med-tech sectors. The initiative seeks to support companies and startups in developing new drugs, complex generics, and medical devices, marking a major push towards innovation.

The scheme, called the Promotion of Research and Innovation in Pharma-MedTech, represents the government's effort to move India beyond its traditional role as a low-cost generics manufacturer and towards becoming a global innovation hub.

Mint explains the scheme's key objectives, funding model, and what it could mean for the future of India's pharma and med-tech industry.

What are the key objectives and financial scope of the PRIP scheme?

The scheme aims to accelerate India's shift from a generics powerhouse to an innovation-led pharma and med-tech hub. It has an approved outlay of ₹5,000 crore and is expected to attract a total R&D investment of about ₹11,000 crore.

Around 300 projects will be supported, with focus areas including new medicines, complex generics, biosimilars , and novel medical devices.

Unlike the ₹15,000 crore production-linked incentive (PLI) scheme, which focused on boosting manufacturing, this is a fresh, standalone budget allocation aimed squarely at innovation. It was first mentioned in the Union Budget of 2023-24 and represents the government's most direct attempt yet to plug India's longstanding gap in pharma and medtech R&D .

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How does PRIP promote industry–academia collaboration?

The scheme offers incentives for MSMEs, startups, and companies to partner with top government academic and research institutions. Applicants with such tie-ups will get preference. Firms can also in-license research outputs from academic institutions, ensuring discoveries don't remain in labs but translate into commercial products.

The scheme also incentivizes the use of funds to create public R&D assets within these institutions.

What levels of financial assistance are on offer?

Financial assistance is tiered based on the project stage.

Early-stage projects (up to ₹9 crore): MSMEs/startups can receive up to ₹5 crore, with 100% funding for the first ₹1 crore and 50% for the balance.

Later-stage projects (up to ₹285 crore): Companies can get up to ₹100 crore, covering 35% of costs. For projects in strategic priority innovation areas, support rises to 50%.

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What are strategic priority innovation (SPI) areas?

SPI areas target public health needs with limited commercial returns-such as rare diseases, antimicrobial resistance, tropical vector-borne diseases, vaccines, and pandemic-causing pathogens.

The scheme provides higher financial assistance-up to 50% of the project cost-for later-stage projects in these areas to strengthen India's health security framework.

What is the application process and timeline?

The application window opened on 1 October, through a dedicated digital portal. Applicants must submit a project plan with sequential milestones, including associated expenditures and timeframes. They also need to provide documents evidencing financial closure for the approved total project cost.

Additionally, applicants must disclose all entities within their related group, as the total financial assistance to a single related group cannot exceed 5% of the scheme's total outlay. The deadline to register on the PRIP Portal is 3 November, and the deadline for application submission is 10 November.

How is industry responding?

Industry leaders have welcomed the move as a milestone.

Himanshu Baid, MD of Poly Medicure Ltd., a manufacturer and exporter of medical devices, called it“a landmark initiative that addresses the missing piece in India's medtech growth story."

He added,“The responsibility now lies with industry to not just manufacture in India but also design, develop, and build world-class medical technologies that compete globally. It is time to move beyond reverse engineering and foster homegrown innovation that can set global benchmarks."

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