Fresh applications invited under PLI Scheme for Medical Devices

1. At a Glance

• The Production Linked Incentive Scheme for Promoting Domestic Manufacturing of Medical Devices (PLI-MD) pays incentives based on how much a firm actually manufactures. It does not give subsidies upfront. The aim is to make high-end medical devices and their components in India. [1]
• The scheme belongs to the Department of Pharmaceuticals (DoP), Ministry of Chemicals and Fertilizers. [1][3]
• PLI-MD 2.0 runs until 2035–36. Norms are simpler and the application window stays open continuously. About ₹2,700 crore is available. [1]
• UPSC relevance: industrial policy (GS-III), Atmanirbhar Bharat and Make in India, the health-security supply chain (GS-II), and import substitution in high-end medtech.

2. Why in the News

• 10 Nov 2026: the Government invited fresh applications under PLI-MD. The scheme period was extended to 2035–36, eligibility was eased, and the application window will stay open over a long period. [1]
• The new round targets equipment not yet made in India: 3T MRI, PET-CT, ultrasound probes and consoles, and high-throughput IVD analyzers. [1]

3. Background & Evolution

• Rationale: cut import dependence in high-end devices, build domestic supply chains, attract investment, create jobs and lower device prices, in line with Atmanirbhar Bharat and Make in India. [1]
• Milestones (chronological):
• March 2020: DoP launches the PLI Scheme for Promoting Domestic Manufacturing of Medical Devices. Total outlay: ₹3,420 crore. [3]
• 9 Dec 2021: PIB release announcing approvals of applicants under the scheme. [2]
• 2021–22: the latest release treats this as the start of the scheme, the base year for its production record. [1]
• 26 Apr 2023: PIB release on the National Medical Devices Policy, 2023. Its stated aim is to grow the sector from US$11 billion to US$50 billion. [4]

• 10 Nov 2026: PLI-MD 2.0. Extended to 2035–36, with ease-of-doing-business reforms based on lessons from phase one and ~₹2,700 crore available. [1]

• Record so far: more than 60 high-end medical devices and components are now made in India, and production is worth over ₹16,000 crore. [1]

4. Core Static Facts

Target Segments (TS) and average incentive rates [1]

• Ease-of-doing-business reforms in 2.0 [1]:
• The minimum sales threshold for claiming the incentive is discontinued.
• The minimum investment requirement is reduced.
• A firm may file any number of applications across Target Segments.

• The application window stays open over a long period.

• Key terms: "Deep manufacturing" means making both the device and its components in India. "Value-chain integration" (prioritised in TS3 and TS4) means producing every stage at home, not only assembling imported parts. [1]

5. Multi-Dimensional Analysis

Economic

• An output-linked incentive pays only for production that actually happens, which limits the fiscal risk of upfront subsidies. [1]
• The tapering rate pushes firms to build scale and competitiveness instead of depending on support. [1]
• The TS2 focus on critical components is meant to bring MSMEs into the supply chain. [1]
• The National Medical Devices Policy 2023 sets the sector goal of US$11 bn → US$50 bn. PLI is one of the tools to get there. [4]

Scientific / Technological

• The scheme moves from assembly to deep manufacturing in imaging (3T MRI, PET-CT), ultrasound and IVD analyzers. [1]
• TS3 and TS4 together cover the technology ladder, from nascent production to assembly-only. [1]

Social / Health

• Stated goals include lower device prices and resilient domestic supply chains, both relevant to affordable healthcare access. [1]
• Making diagnostic equipment (IVD, imaging) at home can widen the availability of diagnostics. [1]

Strategic

• Indigenous supply chains for critical health equipment are part of Atmanirbhar Bharat. [1]

Administrative / Governance

• PLI-MD 2.0 is a correction based on phase-one experience. Removing the sales threshold and keeping the window open address barriers to entry. [1]
• Implementation risk: firms must commission facilities within 3 years, so delays in land, approvals or technology tie-ups can hold up incentive claims. [1]

6. Recent Developments (last 12-18 months)

• 10 Nov 2026: fresh applications invited under PLI-MD 2.0. Extended to 2035–36, ~₹2,700 crore available, norms simplified, open window. [1]
• 10 Nov 2026: reported cumulative record of >₹16,000 crore of production and >60 high-end devices and components made in India since the 2021–22 launch. [1]

7. Prelims Hooks

• PLI-MD is run by the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, not the Ministry of Health and Family Welfare. [1][3]
• Original outlay of PLI-MD: ₹3,420 crore. [3]
• PLI-MD launched by DoP in March 2020. [3]
• Scheme extended up to 2035–36 under PLI-MD 2.0. [1]
• ~₹2,700 crore available in the 2026 round. [1]
• The scheme has 4 Target Segments. [1]
• TS1: consumables, disposables and implants. Average incentive ~5%. [1]
• TS2: critical components. Average incentive ~9%. [1]
• TS3: high-end devices at a nascent stage of domestic manufacturing. Average incentive ~9%. [1]
• TS4: high-end devices only assembled in India. Average incentive 6%. [1]
• The minimum sales threshold for claiming the incentive was discontinued in PLI-MD 2.0. [1]
• Applicants get 3 years to set up manufacturing facilities. [1]
• Production under PLI-MD so far: over ₹16,000 crore. More than 60 high-end devices and components made in India. [1]
• Target products include 3T MRI, PET-CT, ultrasound probes and consoles, and high-throughput IVD analyzers. [1]
• The National Medical Devices Policy 2023 aims to take the sector from US$11 bn to US$50 bn. [4]

8. Why Most of the Money Has Not Been Spent

• Very little incentive money has been paid out so far
• The original outlay (total money set aside) was ₹3,420 crore [3].
• Parliament was told that only about ₹133.95 crore had actually been paid out by around 2024–25 [6].

• That is roughly 4% of the outlay, paid out in the scheme's later years.

• Firms also invested less than they promised

• By June 2023, 26 applicants had put in ₹852 crore. They had committed ₹1,330 crore, so they delivered only 64% [5].

• Only 14 projects had been commissioned (actually started production), covering 36 devices [5].

• This helps explain the ₹2,700 crore figure

• The note says the release does not link ₹3,420 crore and ₹2,700 crore [1][3].
• With so little paid out, ₹2,700 crore looks like the unused part of the original money being carried into PLI-MD 2.0. This is our reading. The release does not say so.

• So 2.0 is not new money. Phase one could not spend the money it had.

• Why this matters for an answer

• In a PLI scheme, unspent money means little production qualified for the incentive. It does not mean the government saved money.
• The 2.0 reforms (no minimum sales threshold, lower minimum investment) quietly admit that the old entry rules kept firms out [1].

9. Why High-End Imports Kept Rising Despite PLI

• The import share is still very high
• The Parliamentary Standing Committee on Chemicals and Fertilisers (Feb 2024) found that 80% of medical devices sold in India are imported [5].
• 70% of high-end devices, such as electronic equipment, advanced surgical tools and diagnostic products, are imported [5].
• Indian production is mostly low- to mid-end: consumables, disposables, implants [5].

• Imports of high-end devices rose between 2019–20 and 2022–23, even with PLI in place [5].

• The tax rules reward importing the finished machine

• India has an inverted duty structure here. That means the import duty on a finished device is lower than the duty on the parts and raw materials used to make it [5].
• So a firm that builds a machine in India pays more tax on its inputs than a firm that simply imports the finished machine.

• A 6% incentive for TS4 (assembly-only devices) [1] has to make up for this tax penalty first. Only what is left over gives the firm any real advantage.

• The tax departments disagree on the fix

• The Department of Pharmaceuticals asked the Department of Revenue to raise customs duty on 40 finished products [5].
• The Revenue Department warned that cutting GST (now 12–18% on devices) would create a different inverted duty problem [5].
• In short, one ministry is paying incentives while the tax rules of another ministry work against it.

10. What the ₹16,000 Crore Figure Does Not Tell You

• Production value is not the same as replacing imports
• ₹16,000 crore is the value of production by scheme firms since 2021–22 [1].
• The release gives no figure for how much imports fell in the same period [1].

• The committee found high-end imports were still rising [5]. So production grew, but imports did not fall.

• It does not tell us how much was actually made in India

• A device put together from imported parts still counts as production.

• Domestic value addition (the share of a product's value created inside India) is the real test of deep manufacturing. The release does not report it [1].

• "60+ devices made in India" needs care

• The new round targets 3T MRI, PET-CT, ultrasound probes and high-throughput IVD analyzers because these are not yet made in India [1].

• So the 60+ list does not yet include the most advanced imaging equipment.

• Dropping the sales threshold is a trade-off

• Good: small firms and MSMEs can now claim the incentive [1].
• Risk: the incentive may be spread across many small units that never reach world scale, which is the very thing the tapering rate is meant to force [1].

11. Is Cash for Output the Right Tool Here?

• The strongest objection
• Firms did not take most of the money even when it was on offer [5][6].
• So money may not be what is holding them back.
• The committee listed other barriers: low R&D investment, lack of skilled workers, low capital investment, weak price and quality regulation, and the inverted duty structure [5].
• It also noted that Department of Pharmaceuticals initiatives since 2015 "are yet to materialise" [5].

• On this view, PLI pays for the last step (production) while the first steps (design, testing, skills) stay broken.

• What the objection gets right

• Making a 3T MRI depends on technology and certified testing, not only on a 6–9% payment on sales.
• India has only 6 central device-testing labs [5]. A firm far from one of them faces delay and cost before it can sell anything.

• The infrastructure side has moved slowly too. Of ₹120 crore set aside for medical device parks in 2022–23, only ₹89 lakh had been spent [5].

• What it gets wrong

• Because PLI pays only for real output, money nobody claims costs the government nothing. Low uptake is a sign of weak design, not wasted spending [1].

• The 2.0 changes go after the entry barriers that phase one exposed [1].

• Fair conclusion

• PLI is necessary but not enough. It works only if tax, testing and skills problems are fixed alongside it.

12. What Each Ministry Needs to Fix Next

• Department of Revenue: end the inverted duty structure
• Today, parts face higher duty than finished devices [5].
• The Standing Committee asked that duty concessions on imported components continue until the industry can supply itself [5].

• Without this change, PLI pays for a handicap that India's own tariffs create.

• Department of Pharmaceuticals: put testing labs near factories

• The committee called the 6 central labs inadequate. It asked for at least one lab near each industry cluster [5].

• Testing is the gate every new device must pass, so this matters most for TS3 high-end devices.

• Health Ministry / CDSCO: regulate imported second-hand devices

• Used imported devices are not covered by the Medical Device Rules, 2017. CDSCO (the national drug and device regulator) sets no safety standard for them [5].

• Cheap used machines undercut new Indian-made ones. The committee asked for quality checks and limits on such imports [5].

• Department of Pharmaceuticals: report the right numbers

• Future releases should publish import levels, domestic value addition and incentive paid, segment by segment, not only total production [1][5].

• Use price control to create a market

• The committee asked that medium and high-end critical-care devices be listed as essential medicines, so their prices are regulated [5].
• Affordable prices help patients and also build steady demand for Indian makers.

13. Anchors for Answers

• Data: 80% of devices sold in India are imported; 70% of high-end devices are imported (Standing Committee, 2024) [5]
• Data: ₹852 crore invested against ₹1,330 crore committed (64%) by 26 PLI-MD applicants, June 2023 [5]
• Data: ~₹133.95 crore in PLI-MD incentives paid out by around 2024–25, against a ₹3,420 crore outlay [6][3]
• Data: Medical device parks: ₹89 lakh spent out of ₹120 crore set aside for 2022–23 [5]
• Report/Committee: Standing Committee on Chemicals and Fertilisers, Promotion of Medical Device Industry (chair: Shashi Tharoor), 8 Feb 2024 [5]
• Law/Case: Medical Device Rules, 2017 (these do not cover imported second-hand devices) [5]
• Scheme: Promotion of Medical Devices Parks Scheme, which provides the shared testing and infrastructure that PLI output depends on [5]
• Scheme: National Medical Devices Policy 2023, sector target of US$11 bn → US$50 bn [4]

14. Mains Relevance

• GS-III: Indian economy (industrial policy and its effect on industrial growth; mobilisation of resources; investment models); Science & Technology (indigenisation of technology).
• GS-II: Government policies and interventions; issues relating to health.
• Possible question stems: 1. Production Linked Incentive schemes reward output rather than inputs. Evaluate the design changes in PLI-MD 2.0 and their likely impact on India's medical-devices import dependence. (15 marks) 2. Moving from assembly to deep manufacturing is the real test of Atmanirbhar Bharat in high-technology sectors. Discuss with reference to medical devices. (10 marks) 3. Examine how domestic manufacturing of medical devices can contribute to affordable and resilient healthcare in India. (10 marks)

15. Related Topics to Study Next

• The PLI framework across sectors: compare design, tapering and outcomes across schemes.
• National Medical Devices Policy, 2023: the umbrella policy whose sector target PLI-MD supports. [4]
• PLI for Bulk Drugs (KSMs/APIs) under DoP: the sister DoP scheme for pharmaceutical import dependence.
• Medical Devices Parks scheme: the infrastructure counterpart to the output incentive (check current status on PIB).
• Scheme for Strengthening the Medical Devices Industry: the DoP's newer support package (check components and outlay on PIB).
• Regulation of medical devices (CDSCO / Health Ministry): the quality-regulation side, which is separate from the industrial-promotion side.
• MSME policy and value-chain integration: TS2 critical components connect to MSME development. [1]
• Make in India / Atmanirbhar Bharat: the overarching vision. [1]

16. NCERT Concepts to Revise

• Production-linked incentive (Economy): The scheme itself: firms are paid based on actual output, with rates that fall over time.
• Inverted duty structure (Economy): Parts are taxed more than imported finished devices, so importing becomes cheaper than making in India.
• Import dependence (Economy): About 80% of devices, and 70% of high-end ones, are imported. Cutting this is the scheme's core aim.
• Atmanirbhar Bharat (Economy): The scheme is framed as part of the self-reliance push for critical health equipment.
• Make in India (Economy): PLI-MD supports this flagship drive to make India a manufacturing hub.
• Import substitution (Economy): The scheme tries to replace imported high-end devices such as MRI and PET-CT with Indian-made ones.
• Supply chain (Economy): The scheme aims to build domestic supply chains and 'deep manufacturing' of devices and components.
• Value added (Economy): Domestic value addition, not just production value, shows whether devices are truly made in India.
• Barriers to entry (Economy): PLI-MD 2.0 removes the sales threshold and cuts minimum investment to lower entry barriers for firms.
• Micro, small and medium enterprises (Economy): TS2 critical components and the eased rules are meant to bring MSMEs into the supply chain.
• Industrial policy (Economy): PLI-MD is an industrial policy tool using output-linked incentives to shape the medical device sector.
• Ease of doing business (Economy): The 2.0 reforms are explicitly ease-of-doing-business changes drawn from lessons of phase one.
• Base year (Economy): Incentives are measured against a base year; 2021–22 is treated as the start of production records.
• Central Drugs Standard Control Organisation (Polity): CDSCO regulates device quality, including imported second-hand devices, separately from industrial promotion.

17. Common Errors / Trap Areas

• Wrong ministry: PLI-MD belongs to the Department of Pharmaceuticals (Ministry of Chemicals and Fertilizers), not the Health Ministry or the Commerce Ministry. [1][3]
• Launch year: DoP launched the scheme in March 2020 [3], but the 2026 release counts results from its "2021–22 launch" [1]. 2020 marks the approval and announcement; 2021–22 is when the scheme began operating and producing. Read the stem carefully.
• Outlay confusion: ₹3,420 crore is the original total outlay [3]. ~₹2,700 crore is the amount available for the 2026 round [1]. The release does not say how the two figures relate.
• TS3 vs TS4: TS3 covers devices at a nascent stage of domestic manufacturing; TS4 covers devices only assembled here. TS4's average rate (6%) is lower than TS3's (~9%). [1]
• TS1 vs TS2: TS1 covers finished consumables, disposables and implants; TS2 covers critical components. TS2 is the segment aimed at MSMEs. [1]