Section A: Sector specific updates

Pharmaceutical

Scheme for Promotion of Research and Innovation in Pharma Medtech Sector (PRIP)

In August 2023, the Government of India (GoI) notified the Scheme for Promotion of Research and Innovation in Pharma MedTech Sector (PRIP Scheme)1 with a total budgetary outlay of approximately USD 600 million2 spread over a period of 5 (five) years. Under the PRIP Scheme, the GoI aims to blend technology and pharmaceutical manufacturing processes to transform Indian Pharma MedTech sector from cost based to innovation-based growth by emphasizing on research and innovation. The PRIP Scheme aims to promote linkage between industry and academia by emphasizing on two key components: (i) strengthening of research infrastructure; and (ii) promotion of research in pharma medtech industry. The scheme proposes to establish centres of excellence in the 7 (seven) existing National Institute of Pharmaceutical Education and Research (NIPER) with each specialising in a distinct field. NIPERs are pharmaceutical education and research institutes which operate directly under the aegis of Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers. The outlay for this first component is approximately USD 84 million.

The second component seeks to promote research and development (R&D) in 6 (six) priority areas: (i) new chemical entity, new biological entity, phyto-pharmaceuticals; (ii) complex generics and biosimilars; (iii) precision medicine; (iv) medical devices; (v) orphan drugs; (vi) drug development for anti-microbial assistance. Previously, to promote the growth of the medical devices sector in India, the GoI had introduced schemes such as Assistance to Medical Device Clusters for Common Facilities (AMD-CF), Scheme for Strengthening of Pharmaceuticals Industry (SPI), Scheme for Promotion of Medical Device Parks, production linked incentive (PLI) scheme for domestic manufacturing of medical devices, etc. Additionally, for streamlining the regulatory framework, the GoI had devised the Medical Devices Rules, 2017 and National Medical Device Policy 2023. A detailed coverage of the National Medical Device Policy 2023 was provided in our last edition of the newsletter at https://induslaw.com/publications/pdf/alerts-2023/korea-newsletter-apr-jun-twenty-twentythree.pdf

The second component of the PRIP Scheme is further divided into 3 (three) categories:

  1. Category I: 9 (nine) established pharma companies will be selected to carry out research in the priority areas in collaboration with GoI institutions. The companies would also be required to train scientists/students at such facilities and the investments made by the companies on such projects would receive financial support under the PRIP Scheme at the rate of 35% (thirty five percent) or approximately USD 15 million, whichever is lower.
  2. Category II: Financial assistance of 35% (thirty five percent) of the total cost incurred or approximately USD 12 million would be provided to 30 (thirty) research projects in the priority areas. The projects will be selected on the basis of a prescribed level measuring commercial potential, national or social impact of the product, affordability etc.
  3. Category III: Approximately USD 120,000 in financial support will be allocated to 125 (one hundred twenty-five) research projects focusing on priority sectors, with the aim of advancing research and development initiatives that bolster the Indian startup ecosystem.

Drugs (Eighth Amendment) Rules, 2022 comes into effect

The Drugs (Eighth Amendment) Rules, 2022 came into force on the August 01, 2023.3 The amendment now requires manufacturers of drug formulation products as specified in the newly inserted Schedule H2 to affix a bar code or quick response code on its primary packaging label or secondary package label (in case of inadequacy of space) that store data or information legible with software application to facilitate authentication. The stored data must include the following details: (i) unique product identification code; (ii) proper and generic name of the drug; (iii) brand name; (iv) name and address of the manufacturer; (v) batch number; (vi) date of manufacturing; (vii) date of expiry; and (viii) manufacturing licence number. The amendment will reportedly enhance the traceability of drug products from manufacturing to distribution, which is crucial for ensuring product authentication.

Electronics

Import restrictions on laptops, tablets and personal computers (PC)

The GoI has announced restrictions from November 1, 2023, on import of laptops, tablets, all-in-one personal computers, and ultra small form factor computers and servers falling under Harmonised System of Nomenclature (HSN) Code 8741. The HSN is a system that assigns a unique code to every product that is traded internationally. The import of the restricted items would be allowed only against a valid licence.4 The restriction does not apply to imports under Baggage Rules, 2016. Further, import of 1 (one) laptop, tablet, all-in-one personal computer, or ultra small form factor computer, including those purchased from e-commerce portals have been made exempt from the restrictions. Another exemption has been provided for research and development purposes, under which 20 (twenty) items per consignment have been made exempt from the restriction. These restrictions reportedly aim to boost domestic manufacturing, reduce reliance on foreign imports, particularly imports from China, and enhance self-reliance in India's technology sector.

Petroleum

Extended producer responsibility for used oil

By way of the Hazardous and Other Wastes (Management and Transboundary Movement) Second Amendment Rules, 2023, the GoI has amended the Hazardous and Other Waste (Management and Transboundary Movement) Rules, 2016, on September 18, 2023. 5 The amendment mandates registration of producers, collection agents, recyclers and used oil importers with the Central Pollution Control Board. With this amendment extended producer responsibility (EPR) for used oil has been introduced. The amendment in its draft form was analysed in our previous edition of the newsletter which can be accessed at https://induslaw.com/publications/pdf/alerts-2023/korea-newsletter-aprjun-twenty-twenty-three.pdf

Renewable Energy and Power

Green Hydrogen Standard for India

The GoI notified the Green Hydrogen Standard for India on August 18, 2023. 6 The standards outlines the emission thresholds that must be met for hydrogen produced to be classified as 'green', i.e., from renewable sources. The scope of the definition encompasses both electrolysis-based and biomass-based hydrogen production methods. For green hydrogen produced through electrolysis (including water treatment, electrolysis, gas purification, drying and compression of hydrogen) as well as conversion of biomass (including biomass processing, heat generation, conversation of biomass to hydrogen, gas purification, drying and compression of hydrogen), the emission should not be more than 2 (two) kg CO2 equivalent / kg H2, taken as an average over last 12 (twelve) month period. The notification also provides Bureau of Energy Efficiency (BEE) as the nodal authority for green hydrogen production projects in India. This step is reported as a crucial step in eliminating ambiguity regarding the criteria for classifying green hydrogen and bringing clarity of the acceptable threshold of carbon footprint for hydrogen projects in India.

Carbon Credit Trading Scheme

The GoI introduced the Carbon Credit Trading Scheme (CCTS) for establishing a framework for facilitating carbon trading in India.7 The CCTS assigns a value, known as a carbon credit, to each tonne of carbon dioxide equivalent reduced or avoided. These credits could be bought, sold and traded within the country's carbon market framework. As per the scheme, the GoI will constitute the National Steering Committee (NSC), which will exercise direct oversight on the governance of the Indian carbon market. BEE will act as the administrator for the carbon market, developing the procedure for accreditation of carbon verification agencies. As the administrator, the BEE will identify sectors with potential for emission reductions, develop targets for obligated entities under the compliance mechanism and issue carbon credit certificates based on recommendations from the NSC. Further, the Central Electricity Regulatory Commission will be the regulator for the trading activities under the Indian carbon market and will register the power exchanges and approve the carbon credit certificate trading. Lastly, the CCTS states that the NSC and other authorities shall develop the detailed procedure for operationalising the Indian carbon market.

Electricity (Amendment) Rules, 2023 – Captive Power Plants

The GoI notified the Electricity (Amendment) Rules, 2023, amending the Electricity Rules, 2005. The requirements for a plant to qualify as a captive generating plant, has now been modified. Earlier, a power plant could qualify as a 'captive generating plant' if: (i) not less than 26% (twenty six percent) of the ownership of the power plant was held by the captive user(s); and (ii) not less than 51% (fifty one percent) of the aggregate electricity generated by such plant (determined on an annual basis) was consumed for captive use. Now, a proviso has been added wherein if a captive generating plant is established by an affiliate company, then the captive user must hold at least 51% (fifty one percent) of the ownership in that affiliate company. 8 The addition of this provision will reportedly permit subsidiaries of captive users to set up captive power plants and benefit from cross subsidy surcharge waiver provided under the Electricity Act, 2003. The amendment also designates Central Electricity Authority (CEA) as the verifying authority for captive power generation plans, the users of which are located in more than one state.

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Footnotes

1. Notification on Scheme for Promotion of Research and Innovation in Pharma MedTech Sector (PRIP), dated August 16, 2023, available at https://pharmaceuticals.gov.in/sites/default/files/Gazette%20Notification%20PRIP%20-%20Dated%2017%20Aug%2023_0.pdf last accessed August 29, 2023.

2. Note: The USD values mentioned in this newsletter are converted from INR to USD at the rate of conversion as on October 30, 2023.

3. Drugs (Eighth Amendment) Rules, 2022, dated November 17, 2022, available at https://cdsco.gov.in/opencms/opencms/system/modules/CDSCO.WEB/elements/download_file_division.jsp?num_id=OTIwMg== last accessed October 09, 2023.

4. Amendment in Import Policy of Items under HSN 8471 of Chapter 84 of Schedule-I (Import Policy) of ITC (HS), 2022–reg, dated August 3, 2023, available at https://egazette.gov.in/WriteReadData/2023/247819.pdf last accessed October 10, 2023

5. Hazardous and Other Wastes (Management and Transboundary Movement) Second Amendment Rules, 2023, dated September 18, 2023, available at https://egazette.gov.in/WriteReadData/2023/248814.pdf last accessed October 10, 2023.

6. Green Hydrogen Standard for India, dated August 18, 2023, available at https://mnre.gov.in/img/documents/uploads/file_f-1692368402544.pdf last accessed October 09, 2023

7. Carbon Credit Trading Scheme, 2023, dated June 28, 2023, available at https://beeindia.gov.in/sites/default/files/CCTS.pdf last accessed October 09, 2023

8. Electricity (Amendment) Rules, 2023, available at https://powermin.gov.in/sites/default/files/webform/notices/Electricity_third_Amendment_Rules_alongwith_relevent_previous_amendments.pdf last accessed October 09, 2023.

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