PLI Scheme for Medical Devices

The PLI Scheme for Medical Devices is a Government of India scheme that pays companies a cash reward for making medical machines and implants in India. The reward is a percentage of the extra sales a company makes from devices produced in its Indian factories. The aim is simple: make India less dependent on imported medical equipment, and make good hospital equipment cheaper and easier to get. It is run by the Department of Pharmaceuticals in the Ministry of Chemicals and Fertilizers.

Why does India need it?

A medical device is anything used to find, treat or watch a disease mainly in a physical way: a syringe, a stent, an MRI machine, a pacemaker. India makes many simple items like syringes and gloves. But for costly, high-technology machines, India has depended heavily on imports. Industry estimates put import dependence at around 70% to 80% even in the mid-2020s [Unverified].

Think of a hospital that must buy every scanner from abroad: it pays in dollars, waits for foreign spare parts, and suffers if global supply breaks down, as it did during COVID-19. Making these devices at home saves foreign exchange, creates skilled jobs and protects health care from supply shocks.

Where did it come from?

On 21 March 2020, the Union Cabinet approved a package to boost domestic manufacturing of medical devices. It had two parts:

• The PLI Scheme for Medical Devices, with an outlay of ₹3,420 crore.
• A separate scheme to support common infrastructure in four Medical Device Parks, with ₹400 crore (up to ₹100 crore per park).

The medical devices PLI was one of the first three PLI schemes, along with mobile phones and bulk drugs. The government later widened the PLI idea to 14 sectors. The scheme's tenure was FY 2020-21 to FY 2027-28. In August 2022, the Department revised the guidelines and split eligible products into Category A and Category B, so that more firms could apply. In November 2026, the government reopened it as PLI-MD 2.0, with about ₹2,700 crore, a tenure extended to 2035-36 and simpler rules.

How does the incentive work?

The scheme rewards extra production, not existing production. Here is the idea in steps:

1. The government fixes a base year (2019-20 in the first phase). The company's sales in that year are the starting line.
2. The company invests in a new factory or line in India and starts making eligible devices.
3. Each year, the government compares the company's sales of those Indian-made devices with the base year.
4. On the incremental sales (the extra above the base year), it pays a fixed percentage as incentive. In the first phase this was 5%, paid for five years, with a cap of up to ₹121 crore per applicant per target segment.

A simple example: if a firm sold ₹100 crore of eligible devices in the base year and ₹300 crore this year, its incremental sales are ₹200 crore. At 5%, it gets ₹10 crore. If it sells nothing extra, it gets nothing. That is why it is called "production linked".

The target segments: then and now

In the first phase, four segments were chosen:

• Cancer care and radiotherapy devices
• Radiology and imaging devices (both ionising and non-ionising, plus nuclear imaging)
• Anaesthetics and cardio-respiratory devices (including cardio-respiratory catheters) and renal care devices
• All implants, including implantable electronic devices like pacemakers and cochlear implants

In PLI-MD 2.0 (2026), the four segments are organised by how far Indian manufacturing has reached:

• Medical consumables, disposables and implants (incentive reported at about 5%)
• Critical components, the key parts inside machines (about 9%)
• High-end devices at an early stage of Indian manufacturing (about 9%)
• High-end devices currently only assembled in India (about 6%)

The higher rates go where India is weakest, such as components. This pushes companies to make the inside parts in India too, not just put imported parts together.

What has it achieved?

By the first phase's later years, the government reported Indian manufacturing of high-end devices such as LINACs, MRI and CT scanners, heart valves and stents. As of September 2025, 21 projects had started manufacturing 54 unique devices, with cumulative eligible sales of about ₹12,344 crore, of which about ₹5,869 crore were exports. By November 2026, the government said over 60 high-end devices and components were being made in India, with production worth more than ₹16,000 crore.

India's position and related schemes

The PLI scheme sits inside a wider push for the medical technology sector:

• National Medical Devices Policy, 2023: India's first full policy for the sector, approved by the Union Cabinet in April 2023. It aims to build a strong domestic industry and reduce imports.
• Medical Device Parks scheme: shared facilities such as testing labs in four parks, approved in Himachal Pradesh, Madhya Pradesh, Tamil Nadu and Uttar Pradesh.
• Scheme for Strengthening of Medical Device Industry (SMDI): support for common facilities in device clusters, clinical studies and skill building.
• PLI for Pharmaceuticals (₹15,000 crore, 2021): a different PLI that covers medicines and some in-vitro diagnostic devices.

Commonly confused concepts

• PLI vs subsidy on capital: PLI pays only after the company produces and sells more. A capital subsidy pays for building a factory whether or not it produces much. The Medical Device Parks scheme is closer to the second type, because it funds shared infrastructure.
• PLI for Medical Devices vs PLI for Pharmaceuticals vs PLI for Bulk Drugs: All three are run by the Department of Pharmaceuticals. Medical devices PLI is about machines and implants; Pharmaceuticals PLI is about finished medicines and some diagnostics; Bulk Drugs PLI is about raw ingredients for medicines (KSMs, drug intermediates and APIs).
• Who regulates vs who promotes: The Department of Pharmaceuticals promotes the industry. Safety and quality are regulated by the Central Drugs Standard Control Organisation (CDSCO) under the Ministry of Health, through the Medical Devices Rules, 2017.

Issues, criticism and the way forward

• Strict early conditions: In the first phase, high investment and sales thresholds kept many smaller firms out. PLI-MD 2.0 removes the minimum sales condition and lowers the investment threshold for this reason.
• Assembly, not deep manufacturing: Critics point out that many "made in India" machines still use imported core parts. The new phase gives higher incentives to critical components to address this.
• Imports still high: Even with the scheme, imports remain large for high-end equipment, so results will take time.
• Way forward: Experts suggest steady policy support over a long period, faster regulatory approvals, testing labs, support for research, and public hospitals buying Indian-made devices, so that companies have assured demand.

Concepts to Know

• Incremental sales: The extra sales a company makes compared to its base year. Only this extra amount earns the PLI reward.
• Base year: The fixed past year used as the starting line for measuring growth.
• Outlay: The total money the government has set aside for a scheme over its life.
• MSME (Micro, Small and Medium Enterprises): Smaller businesses, classified by their investment and turnover.
• Tesla (T) in MRI: The unit of magnetic field strength. A 3T MRI has a stronger magnet than a 1.5T MRI, so it gives sharper images; it is also harder to make.
• LINAC (linear accelerator): A machine that produces high-energy X-rays to kill cancer cells in radiation therapy.
• IVD (in-vitro diagnostic) analyser: A lab machine that tests samples like blood or urine outside the body.