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Scheme for Promotion of Medical Devices Parks

The Government of India has introduced a Scheme for the Promotion of Medical Devices Parks to support the medical devices industry.  The key objective of the scheme is to develop common infrastructure facilities (CIF) which in turn will reduce the production cost of medical devices manufactured in India. The scheme has a total outlay of about Rs 400 Crore.

Under the scheme, financial assistance will be provided for the creation of a Common Infrastructure Facility (CIF)  in four medical device parks selected under the scheme. Vide press release dated 24^th September 2021, Government announced that Himachal Pradesh, Tamil Nadu, Madhya Pradesh, and Uttar Pradesh have given “in-principle” approval to set up Medical Device Parks under the scheme.

The objective of the Scheme for Promotion of Medical Devices Parks

Recognizing the need for higher levels of investments for the creation of proper infrastructure in the sector, the Department of Pharmaceuticals has notified the Scheme for “Promotion of Medical Device Parks” with the following objectives:

• The key objective of the scheme is to create world-class infrastructure facilities to make the Indian medical device industry a global leader.
• The scheme aims to make easy access to standard testing and infrastructure facilities through the creation of world-class Common Infrastructure Facilities
• Reduction of the cost of production of medical devices is another important objective of the scheme
• Scheme for Promotion of Medical Devices Parks has been introduced to make better availability and affordability of medical devices in the domestic market.
• Exploit the benefits arising due to optimization of resources and economies of scale

Features of the Scheme

The scope of the Scheme for Promotion of Medical Devices Parks is as follows:

• As mentioned above, financial assistance will be granted for the creation of CIFs in four medical device parks selected under the scheme.
• The assistance will be 90% of the project cost in northeastern states and hilly states while it will be 70% in other states.
• A medical device park project suggested by a state and selected under the scheme will be implemented by a State Implementation Agency (SIA) and will receive maximum assistance of Rs. 100 cr.
• The scheme will be valid for 5 years from FY 2020-21 to FY 2024-25.

Release of Funds

Grant-in-aid will be released in four installments in the following manner:

Installment	Percentage of Funds	Remarks/ Pre-requisite
1st	30%	On final approval of the project by the SSC and after the deposit of 30 percent of SLA’s share in the project cost in the Trust and Retention Account (TRA) or Escrow or No Lien Account as the case may be, subject to the condition that all relevant environment clearances are in place
2nd	30	60% utilization of the 1st installment and after the proportionate expenditure has been incurred by the SIA with proportionate physical progress of the Medical Device Park as per the DPR Against the production of Bills
3rd	30	100% utilization of 1st installment and at least 60% utilization of 2 installments and after the proportionate expenditure has been incurred by the SIA with proportionate physical progress of the Medical Device Park as per the DPR  Against the production of Bills
4th	10	100% utilization of 2nd and 31d installments SIA has mobilized and spent its entire share in proportion to the grant and completed the project in all respects.

Application Procedure

The application procedure to submit a proposal under the Scheme for Promotion of Medical Devices Parks is explained in detail below:

Proposal

The State Government will identify a suitable location for the establishment of a Medical Device Park keeping in mind various factors:

• Assured availability of power
• Assured availability of water
• Transport connectivity with railways
• The national highway,  port, and airport
• Environmental aspects

The identified location should be well away from the eco-sensitive zone of protected areas.

The proposer State shall submit an undertaking that it shall not increase the land lease rent and utility charges, as declared in the proposal, beyond 5% per annum, for the next 10 years

The proposal under the Scheme shall be made within 60 days of issuance of these guidelines; The format of the proposal is enclosed here for reference:

Guidelines of the Scheme Promotion of Medical Devices Parks_1-15-19

Selection of Proposal

The States obtaining the top four ranks will be considered for selection under the Scheme.

In-Principle approval under the Scheme

Department of Pharmaceuticals will issue a letter of in-principle approval to the selected States, post receiving in-principle approval

Detailed Project Report

Detailed Project Report to be submitted to Department of Pharmaceuticals by the selected State Government within 180 days of the date of issuance of the in-principle approval letter

States to be ranked based on 11 factors including Utility charges, state policy infrastructure, Connectivity, Lease rate, area of the proposed park, Power and water availability, Stamp Duty and Registration charges, Ease of Doing Business Ranking, Availability of Technical Manpower, etc.

Final Approval under the Scheme

Department of Pharmaceuticals will issue a letter of final approval to the selected State after due processes are complete.

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