India's biggest incentive scheme for hospital machinery has been given nine more years. On 10 November 2026, the Department of Pharmaceuticals (DoP) announced that the Production Linked Incentive (PLI) Scheme for Promoting Domestic Manufacturing of Medical Devices (PLI-MD) has been extended up to 2035-36, and it has invited fresh applications. About ₹2,700 crore of outlay is available for the purpose, and an online portal is to open within about 10 days.
The new version, which the release calls PLI-MD 2.0, does more than lengthen the clock. It removes the minimum sales threshold that firms had to meet before claiming incentive, trims the minimum investment, keeps the application window open for a long period, and pushes manufacturers towards critical components rather than just final assembly. This article explains what the scheme is, how a PLI works, what the first phase achieved and what is new.
The news in brief
The announcement came from the DoP, which sits under the Ministry of Chemicals and Fertilizers. The main points:
- Extension: the scheme now runs up to 2035-36. The original incentive period ran only from FY 2022-23 to FY 2026-27.
- Outlay available: about ₹2,700 crore, to be used for the new round.
- Applications: through an online portal, due to open in about ten days. Firms may submit any number of applications in one or more target segments, and the window stays open continuously over a long period.
- Time to build: applicants get three years to set up their manufacturing facilities.
- Results so far: since launch in 2020-21, the scheme has led to domestic manufacture of over 60 high-end medical devices and components, with production valued at over ₹16,000 crore. The devices include X-ray tubes and detectors, 1.5T MRI, LINAC, CT scanners, mammography machines, cath labs, orthopaedic and cardiac implants and dialyzers.
What is a PLI scheme?
A Production Linked Incentive pays a company a share of its incremental sales of goods made in India, not a grant up front. The firm first invests and builds; only then, if its sales rise above a base year, does it earn the incentive. The payment is tied to performance, which is why the scheme is called "production linked". A rough example: if a selected company's eligible sales rise by ₹100 crore, and the incentive rate is 5%, it earns ₹5 crore.
PLI schemes began in 2020 with electronics and pharmaceuticals and now cover a long list of sectors. They share three aims: to attract investment, to cut import dependence, and to build export strength under Atmanirbhar Bharat and Make in India. Our earlier explainers on the textile PLI and the mobile phone manufacturing scheme show how the same device works in other industries.
The DoP runs three PLI schemes:
| Scheme | Outlay | Production period | Focus |
|---|---|---|---|
| Pharmaceuticals | ₹15,000 crore | FY 2022-23 to 2027-28 | High-value drugs; 55 applicants selected |
| Bulk drugs (KSMs, DIs, APIs) | ₹6,940 crore | FY 2022-23 to 2028-29 | 41 identified bulk drugs |
| Medical devices | ₹3,420 crore (phase one) | FY 2022-23 to 2026-27, now extended | Four target segments |
(KSMs are key starting materials, DIs drug intermediates and APIs active pharmaceutical ingredients.)
Why medical devices needed a push
A medical device is any instrument, machine, implant or reagent used to diagnose, treat or monitor a patient. The DoP groups the sector into five categories: electro-medical equipment, implants, consumables and disposables, surgical instruments and in vitro diagnostic reagents.
India imported most of its high-end equipment. In a Parliament reply of March 2026, the Government said that when it launched the PLI scheme in 2020, it assessed that the domestic market was heavily import dependent, with imports forming more than 85% of the market. The reasons are structural: the sector is capital-intensive, has long gestation periods, and needs constant new technology and trained users.
High-end scanners and cancer-treatment machines that are imported tend to be costly, and spare parts and service also depend on the supplier abroad. This is the gap the PLI-MD scheme was designed to narrow.
How phase one worked
The original PLI-MD offered a 5% incentive on incremental sales of devices made in India, for five years, to selected companies. It covered four target segments:
- cancer care and radiotherapy devices,
- radiology and imaging devices, including nuclear imaging,
- anaesthetics and cardio-respiratory devices, including renal care devices, and
- implants.
The latest official numbers, from a PIB release of 13 March 2026 (data up to December 2025), show the scale:
- 28 applicants approved, with incentive of ₹157.15 crore disbursed to seven of them.
- 24 greenfield projects commissioned, with production started for 57 products.
- Cumulative eligible sales of ₹13,624.52 crore, of which ₹6,425.48 crore were exports.
Note the earlier count: in December 2024, 32 applicants had been selected, with 19 greenfield projects commissioned for 44 products, so the number of approved applicants has changed over time. The headline production figure in the 10 November 2026 release, over ₹16,000 crore, is a later cut and is a measure of production, not the eligible sales above. Examiners usually stay with the figure in the latest release, so use ₹16,000 crore for this news.
What is new in PLI-MD 2.0
The release says that the changes come from "learnings in the first phase".
1. Four target segments, with a new emphasis. The segments are now described by their stage of manufacturing, not by device type:
| Target segment | What it covers | Incentive (tapering, average) |
|---|---|---|
| TS 1 | Consumables, disposables and implants | about 5% |
| TS 2 | Critical components | about 9% |
| TS 3 | High-end devices at a nascent stage of domestic manufacture | about 9% |
| TS 4 | High-end devices that are only assembled in India at present | about 6% |
The incentive rate tapers over the years, and the figures are averages. Components get the highest rate, together with the newest high-end machines. The reason is value chain integration: assembling an imported kit adds little, but making the X-ray tube or the detector inside a machine builds real capability and gives a boost to MSMEs, which are likely suppliers.
2. Easier rules. The minimum sales threshold a firm had to meet to claim incentive has been discontinued, and the minimum investment requirement has been trimmed. A firm no longer has to cross a sales bar before the incentive starts, which helps new entrants and smaller firms.
3. More time and a longer window. Three years to build the plant, no cap on the number of applications, and a window that remains open over a long period instead of closing after one round. This follows the logic of ease of doing business.
4. Consumables with quality. In TS 1, the focus is on manufacturing scale and world-class quality. In TS 3 and TS 4, priority goes to value chain integration.
5. Machines not yet made in India. The scheme now aims at equipment such as 3T MRI, PET-CT, ultrasound probes and consoles, and high-throughput IVD analyzers, which the release says are currently not manufactured in the country. A 3T MRI, for example, has twice the magnetic field strength of the 1.5T machine that is already being built, and gives sharper images.
The wider ecosystem
The PLI is one of several pillars for the sector.
- Medical Devices Parks. Three parks are being developed at Greater Noida (Uttar Pradesh), Ujjain (Madhya Pradesh) and Kanchipuram (Tamil Nadu), with a total project cost of ₹871.11 crore and Central grant of ₹100 crore each, to provide common testing and infrastructure.
- Regulation. The Medical Devices Rules, 2017, administered by the Health Ministry through the Central Drugs Standard Control Organisation (CDSCO), regulate quality and safety. Since 1 April 2020, all medical devices are notified as "drugs" under the Drugs and Cosmetics Act, 1940. Devices are grouped into Classes A, B, C and D by risk, with D the highest.
- Prices. The National Pharmaceutical Pricing Authority fixes ceiling prices for some devices, such as stents and some implants.
- Research. The Department also supports innovation through its research and development scheme, as we noted in our explainer on the PRIP pharma and medtech innovation round.
- Exports and investment. Exports of medical devices were about US$4.0 billion in FY 2024-25, up from US$2.5 billion in 2020-21, and foreign direct investment into the sector totalled ₹20,658 crore between 2018-19 and December 2025.
Why it matters, and the caveats
Health and costs. Machines made at home can lower prices, shorten delivery and ease repairs, widening access to diagnosis and treatment. This is the stated aim of the scheme: to improve quality and reduce the price of Made in India devices.
Industrial depth. Real capability lies in components. A country that only assembles remains dependent on foreign suppliers for the parts that matter. The higher incentive for TS 2 is a direct response.
Defence and security link. Medical devices are also a strategic area, because armed forces hospitals and field medical units depend on imaging, anaesthesia and critical-care equipment. Domestic supply can lower vulnerability to import disruptions. This link is useful for essay and interview answers.
Caveats. Incentives are paid only for sales, so the actual money disbursed (₹157.15 crore up to December 2025) is small next to the outlay. The scheme depends on firms executing projects, finding customers and meeting quality norms. And a PLI is a time-bound push, not a permanent subsidy. The CDS/OTA economy notes on industry and services cover the wider policy context for manufacturing.
🔑 Revision block
The news. 10 November 2026: DoP (Ministry of Chemicals and Fertilizers) extends PLI-MD up to 2035-36; fresh applications; about ₹2,700 crore available; online portal in about 10 days.
Scheme facts. Launched 2020-21; original outlay ₹3,420 crore; incentive 5% of incremental sales for five years; original period FY 2022-23 to 2026-27; four target segments.
Results. Over 60 devices and components; production over ₹16,000 crore. As of December 2025: 28 approved, 24 greenfield projects, 57 products, eligible sales ₹13,624.52 crore (exports ₹6,425.48 crore), incentive paid ₹157.15 crore.
PLI-MD 2.0 changes. Minimum sales threshold discontinued; minimum investment trimmed; 3 years to set up; any number of applications; continuous window. Tapering incentive: ~5% TS 1, ~9% TS 2 and TS 3, 6% TS 4. Priority: critical components, 3T MRI, PET-CT.
Ecosystem. Parks at Greater Noida, Ujjain, Kanchipuram (₹871.11 crore; ₹100 crore each). Medical Devices Rules, 2017; devices are "drugs" since 1 April 2020; CDSCO; Classes A–D. Imports were over 85% of the market in 2020.
🎯 Practice MCQs
Q1. The PLI scheme for medical devices is administered by the:
(a) Department of Health and Family Welfare
(b) Department of Pharmaceuticals
(c) Department of Science and Technology
(d) Department for Promotion of Industry and Internal Trade
→ (b)
The Department of Pharmaceuticals, under the Ministry of Chemicals and Fertilizers, runs the PLI schemes for pharmaceuticals, bulk drugs and medical devices. The Health Department administers the device rules.
Q2. In a PLI scheme, the incentive is paid on:
(a) The size of the investment made
(b) The number of persons employed
(c) Exports alone
(d) Incremental sales of goods manufactured in India
→ (d)
The payment is linked to growth in sales of eligible goods made in India, so the firm earns only after it produces and sells.
Q3. The PLI-MD scheme has been extended up to the financial year:
(a) 2027-28
(b) 2030-31
(c) 2035-36
(d) 2040-41
→ (c)
The 10 November 2026 announcement extended it to 2035-36. The original incentive period ended in 2026-27.
Q4. Which of the following is a change introduced in PLI-MD 2.0?
(a) Imports of finished devices have been banned
(b) A higher minimum sales threshold is required to claim incentive
(c) Applications are accepted only once in the scheme period
(d) The minimum sales threshold to claim incentive has been discontinued
→ (d)
The release says the minimum sales threshold is discontinued, the minimum investment is trimmed and the application window stays open for a long period.
Q5. Under PLI-MD 2.0, the highest average incentive rates are for:
(a) Consumables and disposables
(b) Critical components and nascent high-end devices
(c) High-end devices that are only assembled in India
(d) Implants alone
→ (b)
TS 2 (critical components) and TS 3 (nascent high-end devices) get about 9%, against about 5% for TS 1 and 6% for TS 4.
Q6. Medical devices in India are regulated for quality and safety under:
(a) The Medical Devices Rules, 2017, and the Drugs and Cosmetics Act, 1940
(b) The Essential Commodities Act, 1955
(c) The Indian Medical Council Act
(d) The Bureau of Indian Standards Act alone
→ (a)
The Rules are administered by the Health Ministry through CDSCO. All medical devices are notified as drugs under the 1940 Act since April 2020.
Q7. Consider the following statements about the Scheme for Promotion of Medical Devices Parks:
1. Parks are being developed at Greater Noida, Ujjain and Kanchipuram.
2. The Central grant is ₹100 crore for each park.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
→ (c)
Three parks at those locations, each with ₹100 crore of Central assistance for common infrastructure, at a total project cost of ₹871.11 crore.
Q8. Consider the following statements about the first phase of PLI-MD, up to December 2025:
1. It offered an incentive of 5% of incremental sales for five years.
2. All the approved applicants had been paid incentive by then.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
→ (a)
The 5% for five years is correct. Only seven of the 28 approved applicants had been paid (₹157.15 crore), so statement 2 is wrong.
📋 How this gets asked (PYQ pattern)
Government-scheme questions in the CDS paper rarely ask for large numbers. They test purpose, administering body and mechanism.
The first pattern is mechanism: what a production linked incentive pays on (incremental sales) and how it differs from a subsidy or a capital grant. Options often use "investment", "employment" or "exports" as distractors, as in Q2.
The second is ministry and body: Department of Pharmaceuticals versus Health, CDSCO versus NPPA, and which Act regulates devices. Mixing these up is the common slip.
The third is recent changes: what the latest announcement altered. For this cycle the hooks are the 2035-36 extension, the removal of the minimum sales threshold, the component focus and the 3T MRI and PET-CT targets. Static anchors to revise alongside: Atmanirbhar Bharat, Make in India and the list of sectors that already have PLI schemes.
Preparing for CDS? List every PLI scheme with its ministry and sector on a single page; questions often ask which scheme belongs to which department. Revise the background with our CDS/OTA study material. Follow the daily CDS current affairs, and learn with experienced faculty in the upcoming Cavalier courses in Delhi.
Source: PIB / Ministry of Chemicals and Fertilizers (Department of Pharmaceuticals), "PLI Scheme for Medical Devices extended up to 2035–36; Fresh applications invited", 10 November 2026. Phase-one data from PIB releases of 13 March 2026 (Medical Devices Manufacturers), 3 February 2026 (regulation of medical devices), 13 February 2026 (Bulk Drug Parks) and 13 April 2025 (backgrounder on pharmaceuticals and medical devices). The ₹100 crore sales example is illustrative and calculated by The Cavalier.
✍️ Written by Aditya Tiwari — Economy & current-affairs faculty at The Cavalier. Reviewed by the Cavalier Faculty Desk.