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Centre Proposes ₹5,000 Crore R&D Fund to Boost Pharma and MedTech Innovation

Written by: Team Angel OneUpdated on: 7 Oct 2025, 7:08 pm IST
Centre launches ₹5,000 crore PRIP scheme to boost pharma and MedTech R&D, supporting innovation, startups, and Centres of Excellence across India.
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The Indian government has unveiled a ₹5,000 crore (around $600 million) initiative aimed at promoting research and innovation in the pharma and medical technology sectors. Spanning FY 2023-24 to FY 2029-30, the scheme seeks to shift India’s life sciences economy from a volume-driven, cost-based generic manufacturing hub to a sector focused on innovation and global competitiveness.

Why is the Initiative Needed?

India’s pharmaceutical sector largely focuses on generic drug manufacturing, but its share in the global market stands at just 3.4%. Globally, innovative drugs account for roughly two-thirds of the pharmaceutical market, presenting a potential $3.2 trillion opportunity by 2030.

Despite being a major supplier of affordable medicines, India’s R&D spend remains low, at around $3 billion, compared with $50–60 billion in the USA and $15–20 billion in China. Similarly, the medical devices industry in India is underdeveloped, holding just 1.5% of the global market while importing 70–80% of its requirements. The scheme aims to address these structural challenges by incentivising domestic innovation.

What the PRIP Scheme Offers?

The Scheme for Promotion of Research and Innovation in Pharma MedTech Sector (PRIP) is now open for registration, with applications accepted until November 10, 2025. The scheme has two main components:

  1. Centres of Excellence (CoEs): A budget of ₹700 crore is allocated to establish seven CoEs at National Institutes of Pharmaceutical Education and Research (NIPERs) across India. Each CoE will specialise in a specific area, including antiviral/antibacterial drug discovery, medical devices, bulk drugs, flow chemistry, novel drug delivery, phytopharmaceuticals, and biological therapeutics.
  2. Industry R&D Support: The remaining ₹4,200 crore is aimed at fostering innovation among companies and startups. Early-stage projects can receive up to ₹5 crore, with full funding for projects under ₹1 crore. Later-stage projects, closer to commercialisation, can receive up to ₹100 crore, with funding covering up to 35% of the project cost. Strategic public health innovations, such as orphan drugs or treatments for antimicrobial resistance, may receive support of up to 50%.

Projects involving reputable government research institutions and demonstrating potential for product development and commercialisation will be prioritised. The scheme also encourages licensing of intellectual property, shared use of research infrastructure, and joint development of technologies.

No Free Money

The Centre maintains a ‘Benefit-Share’ mechanism in commercial outcomes. Companies must repay financial assistance through royalties, tiered payouts, or equity, depending on project stage and total funding received.

Read more:USFDA Speeds Up Approval for Generics Made in the US – Impact on Indian Manufacturers

Governance and Oversight

Implementation, monitoring, and fund disbursement will be managed by a dedicated Project Management Agency, overseen by an Empowered Committee chaired by the CEO of NITI Aayog. A Project Appraisal Committee and a Technical Committee with experts from government, academia, and industry will provide additional oversight.

The PRIP scheme marks a structured effort to strengthen India’s innovation capacity in pharma and MedTech, aligning domestic research with global opportunities.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.

Published on: Oct 7, 2025, 1:27 PM IST

Team Angel One

Team Angel One is a group of experienced financial writers that deliver insightful articles on the stock market, IPO, economy, personal finance, commodities and related categories.

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