India’s PRIP Scheme: From Generics Leader to Innovation Powerhouse in Pharma & MedTech

Introduction

India is the world’s pharmaceutical powerhouse. Also called the ‘pharmacy of the world,’ India plays a significant role in supplying generic drugs, vaccines, and Active Pharmaceutical Ingredients (APIs) worldwide. The country ranks third globally in drug production, accounting for nearly 10% of the world’s pharmaceutical output by volume, and exports to over 200 countries, including highly regulated markets such as the US, EU, and Japan.¹ Not only that, India is the largest supplier of DPT, BCG, and measles vaccines, and among the biggest global suppliers of low-cost vaccines.² Over the past few decades, the nation's pharmaceutical sector has experienced robust growth, with a turnover of over $50 billion in FY2024 and estimated to reach $130 billion by 2030 at a CAGR of 11-12%.³ Alongside pharmaceuticals, India’s medical technology (MedTech) sector is also expanding and positioning itself as a potential global hub. Valued between $12–15 billion as of 2024–25, India’s MedTech market is expected to grow to $50 billion by 2030.⁴ India is already the fourth-largest MedTech market in Asia, after Japan, China, and South Korea, and ranks among the top 20 worldwide, driven by rising incomes, medical tourism, and increasing demand for advanced diagnostics.

This growth in India’s pharmaceutical and MedTech industry has been driven by cost efficiency and global demand for affordable healthcare solutions, all the while ensuring quality of solutions being delivered. However, India contributes only about 1.5% pharmaceuticals by value, exposing the value gap in the current ecosystem.⁵ To maintain its leadership and advance along the value chain, India needs to shift from being a volume-oriented player to becoming an innovation-driven hub. To foster this momentum and expand healthcare innovation in India, the government introduced the Promotion of Research and Innovation in Pharma MedTech (PRIP) scheme in 2023. PRIP complements a range of government schemes for the pharma sector aimed at enhancing competitiveness and ensuring long-term sustainability. The scheme’s aim is clear: to transform India into a global powerhouse not just in manufacturing affordable drugs, but also in research and development (R&D) in the Pharma MedTech sector. With a total outlay of ₹5,000 crore, the scheme aims to increase the competitiveness of Indian Pharma across the six priority areas.

1. New Chemical Entity (NCE), New Biological Entity (NBE), and Phyto-pharmaceuticals
2. Complex Generics and Biosimilars
3. Precision Medicine (Targeted Innovative Therapeutics)
4. Medical Devices
5. Orphan Drugs
6. Drug Development for AMR

The scheme is expected to be one of the major drivers of innovation in the country by expanding the industry’s presence in the innovation space. The scheme concentrates on enhancing research infrastructure, fostering industry–academia collaborations, nurturing scientific talent, and creating quality jobs. Divided into two components, the scheme emphasises on R&D in India while also reducing reliance on pharmaceutical imports for high value drugs⁶:

1. The component A of the scheme focuses on enhancing research infrastructure, where ₹700 crore is allocated for creating seven Centers of Excellences (CoE) at NIPERs.⁷ Each CoE will focus on pre-identified areas of pharma & medtech R&D. Through this, the government aims to build world-class labs, attract top talent, and create a skilled industry ready workforce.
2. The component B of the scheme focuses on industry-led R&D, where the government has allocated ₹4,250 crore to support the sector, MSMEs, startups, and academia.⁸ The scheme’s goal through this component is to encourage both in-house innovation and collaborations with research institutes, while also translating commercial outcomes to strengthen India’s presence in high-value pharma and MedTech segments. This component is further divided into three subcategories:
- a. Category B-I: With a total Fund Allocation of INR 1125 crores (USD 135.4 Mn), 9 established Pharma and Med Tech companies (with maximum of 3 Foreign MNCs) willing to conduct research with academic collaboration in Government's institutes shall be supported. Investment would be supported at the rate of 35% of the total cost or INR 125 Cr (USD 15 Mn) whichever is less on a milestone basis from TRL 1 to reach TRL 9 over a period of five years on benefit sharing principle.
- b. Category B-II: With a total Fund Allocation of INR 3000 crores (USD 361 Mn), 30 participants/ projects with a maximum of 10 Foreign MNCs doing research shall be supported under this category. The research work would be supported at the rate of 35% of the total cost or INR 100 Cr (USD 12 Mn) whichever is less on a milestone basis from TRL 5 to reach TRL 9 over a period of five year on benefit sharing principle.
3. Category B-III: With a total Fund Allocation of INR 125 crores (USD 15 Mn), funding up to INR 1 Cr would be provided to research projects to help innovators including Indian startups and MSMEs to reach from TRL 1 to TRL 4. 125 research projects from innovators/ start-ups/ SMEs/ MSMEs having potential or having made sufficient headway in the research of priority areas will be selected under this component.

PRIP’s impact

PRIP has the potential to deliver wide-ranging outcomes across the pharma and MedTech value chain:

R&D: CoEs at NIPERs will establish a world-class research environment and develop a pipeline of trained scientific talent.
Industry–academia collaboration: Joint ventures between companies and institutes will accelerate knowledge transfer and foster scalable discoveries.
Innovation: Targeting biosimilars, orphan drugs, and MedTech devices, the scheme positions India to capture two-thirds of the global pharmaceutical opportunities driven by innovation. It also strengthens the base for innovation in biotechnology in India, which is emerging as a critical growth driver globally.
Commercialisation and exports: Support for market-ready products will enhance revenue, improve export competitiveness, and generate quality employment.
Healthcare boost: By enabling affordable, accessible solutions for critical health challenges, PRIP can ease India’s healthcare burden while expanding access globally.

These benefits are designed to help India transition from a generics-based industry to an innovation-driven ecosystem, thereby narrowing the value gap in the pharmaceutical sector and fueling the next stage of growth in both the pharmaceutical and medtech industries.

Conclusion

India’s pharmaceutical industry is already well-established, but its next phase of growth depends on moving beyond generics and low-cost manufacturing to high value drugs and therapies to become a true leader in innovation. That is what PRIP envisions.

By strengthening research infrastructure, funding industry-led projects in priority areas, and fostering collaboration between academia and industry, PRIP is laying the groundwork for India to expand into high-value segments, including biologics, biosimilars, orphan drugs, and medical devices. Once fully implemented, the scheme will complement existing initiatives such as the Bulk Drugs Parks and MedTech parks, unlocking new opportunities across the pharma and MedTech ecosystem. This creates a fertile ground for India’s pharma investment opportunities, spanning both established players and startups.

PRIP is not just shaping India’s pharma story; it is cementing the country’s legacy in the sector while rebranding its MedTech industry as a hub of global innovation. For global and domestic investors, this policy push signals India’s evolution into a hub of high-value innovation, creating unprecedented India pharma investment opportunities.