Uttar Pradesh Pharmaceutical and Medical Device Industry Policy, 2023

POLICY AT A GLANCE

The policy covers pharmaceutical products, bulk drugs, active pharmaceutical ingredients, key starting materials, drug intermediates, medical devices and related manufacturing infrastructure. Official sector material states that medical-device units and manufacturers of key starting materials and drug intermediates are eligible for policy incentives.

What is the Uttar Pradesh Pharmaceutical and Medical Device Industry Policy?

The policy is an investment and industrial-development framework intended to expand pharmaceutical and medical-device manufacturing in Uttar Pradesh.

It supports both manufacturing units and common industrial infrastructure. Its coverage includes:

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  Pharmaceutical formulations;
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  Bulk drugs and active pharmaceutical ingredients;
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  Key starting materials and drug intermediates;
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  Medical devices and diagnostic equipment;
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  Research and development facilities;
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  Quality-testing and certification infrastructure;
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  Clinical research and product-validation activities;
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  Common effluent-treatment and waste-management systems;
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  Pharmaceutical and medical-device parks.

The policy applies to greenfield projects and qualifying brownfield expansion or diversification projects. A new facility must independently satisfy the policy’s eligibility requirements; an existing unit cannot claim incentives merely for routine replacement of machinery or normal maintenance expenditure.

Why was the policy introduced?

Pharmaceutical manufacturing requires specialised industrial infrastructure, regulated production facilities, laboratories, quality certification, waste-treatment systems and access to trained scientific and technical personnel. Medical-device manufacturing involves additional requirements such as precision engineering, clean rooms, calibration, testing and product certification.

The state therefore sought to combine capital incentives with assistance for research, clinical trials, quality certification, environmental compliance and common infrastructure. The framework also supports the proposed bulk-drug and pharmaceutical park in Lalitpur and the medical-device park in Sector 28 of the Yamuna Expressway Industrial Development Authority region.

These projects and the policy’s investment objectives should not be described as completed achievements unless later official sources confirm land allotment, construction, commissioning or commercial production.

What are the main objectives?

The policy seeks to:

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  Attract pharmaceutical and medical-device manufacturing investment;
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  Promote domestic production of active pharmaceutical ingredients, drug intermediates and medical devices;
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  Encourage research, innovation and product development;
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  Support clinical research and product validation;
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  Develop pharmaceutical and medical-device parks;
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  Improve testing, certification and quality infrastructure;
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  Promote environmentally compliant manufacturing;
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  Generate skilled and semi-skilled employment;
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  Encourage exports and integration with national and international supply chains;
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  Facilitate collaboration among industry, universities and research institutions.

The policy’s wider purpose is to create an integrated sectoral ecosystem rather than supporting only finished-drug manufacturing.

Who is eligible?

The principal eligible categories include:

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  Pharmaceutical manufacturing units;
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  Medical-device manufacturing units;
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  Manufacturers of key starting materials;
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  Drug-intermediate manufacturers;
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  Active pharmaceutical ingredient and bulk-drug units;
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  Eligible greenfield projects;
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  Qualifying expansion or diversification projects;
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  Developers of pharmaceutical or medical-device parks;
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  Research, testing and clinical-development facilities satisfying policy conditions.

Project eligibility depends on the nature of the product, location, investment, commercial-production date and approval by the competent authority.

A unit must obtain all applicable licences and regulatory approvals. These may include approvals from the Central Drugs Standard Control Organisation, the Uttar Pradesh Food Safety and Drug Administration, pollution-control authorities and other sector-specific regulators.

State incentive approval does not replace a manufacturing licence, medical-device registration, environmental clearance or product approval.

What financial incentives are available?

Capital subsidy

The policy provides a capital subsidy equal to 15 per cent of eligible investment, capped at Rs 200 crore.

The subsidy is to be disbursed in five annual instalments.

The term “eligible investment” does not necessarily include every part of the project cost. Applicants should verify the treatment of:

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  Land;
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  Buildings;
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  Plant and machinery;
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  laboratory equipment;
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  Utilities;
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  Research equipment;
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  Second-hand machinery;
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  Taxes and duties;
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  Expenditure incurred before the eligible date.

The subsidy should not be calculated until the competent authority confirms the eligible investment base.

Interest subsidy on plant and machinery

Eligible units may receive an interest subsidy of 5 per cent a year for five years on loans taken for plant and machinery. The annual ceiling is Rs 1 crore per unit.

Units in Bundelkhand and Purvanchal may receive an additional interest subsidy of 2 per cent a year for seven years, subject to the policy conditions.

The benefit applies to eligible interest actually paid and does not amount to reimbursement of the entire loan instalment.

Interest subsidy on building infrastructure

The policy provides an interest subsidy of 5 per cent a year for five years on eligible loans taken for building infrastructure intended for the unit’s own use. The annual ceiling is Rs 1 crore per unit.

Commercial property acquired for leasing or unrelated use should not be assumed to qualify.

Research and quality-improvement finance

Official policy material provides interest support for loans taken for research and quality improvement. The Invest UP summary refers to reimbursement equal to 50 per cent of eligible interest for five years, capped at Rs 2 crore per unit.

Applicants should verify the precise eligible loan, research activity and annual claim process before including this benefit in a project model.

Stamp-duty exemption

Eligible units may receive 100 per cent stamp-duty exemption on qualifying land purchases or leases.

The exemption remains subject to an approval certificate, the type of land transaction and the applicable government order. It should not be assumed to apply automatically at registration.

Electricity-duty exemption

The policy provides full electricity-duty exemption for an eligible period. Official Invest UP material describes a 100 per cent exemption, but the applicable duration and commencement conditions should be confirmed from the operative government order and approval letter.

Electricity-duty exemption does not mean free electricity. The unit remains liable for power tariffs, demand charges and other non-exempt charges.

What research, certification and clinical support is available?

In-house research and development

The policy supports approved expenditure on in-house research and development facilities, including specialised machinery and laboratory infrastructure.

Official policy summaries refer to assistance of up to 30 per cent on eligible research machinery. The applicable ceiling and eligible equipment must be confirmed from the policy document and implementation guidelines.

Contract and sponsored research

The framework provides support for research undertaken with recognised universities, research institutions and laboratories. This is intended to encourage product development, testing and industry-academic collaboration.

Clinical trials and product validation

The policy provides assistance for qualifying clinical trials and validation activities. Official Invest UP material refers to reimbursement of up to 75 per cent for specified clinical-trial expenditure.

Clinical trials remain subject to approvals and ethical and regulatory requirements administered by the competent Union government authorities. A state incentive does not authorise a trial independently.

Patents and quality certification

The policy provides reimbursement for domestic and international patent filing and for quality certifications.

Official policy material refers to:

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  Reimbursement of 75 per cent of the cost of specified International Organization for Standardization certification;
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  Reimbursement of 50 per cent of costs associated with other eligible certifications and quality approvals.

Eligible standards may include certifications required for pharmaceutical and medical-device markets, subject to recognition under the policy. Applicants should verify whether a specific World Health Organization, Bureau of Indian Standards, European conformity or other certification qualifies.

What environmental and infrastructure support is available?

Pharmaceutical manufacturing can generate complex liquid, chemical and biological waste. The policy therefore provides support for eligible waste-management facilities.

Official Invest UP material refers to an interest subsidy equal to 50 per cent of annual interest for five years on loans taken to establish waste-management systems, capped at Rs 10 lakh.

The policy also supports common infrastructure in pharmaceutical and medical-device parks, including:

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  Common effluent-treatment plants;
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  Waste-management facilities;
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  Testing laboratories;
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  Logistics infrastructure;
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  Warehousing;
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  Power and water systems;
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  Research and training facilities;
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  Plug-and-play manufacturing infrastructure.

The specific support available to a park developer depends on its project category, eligible common infrastructure and approval package.

How can an applicant access the benefits?

The broad application process involves:

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  Preparing a detailed project report;
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  Identifying the eligible pharmaceutical or medical-device category;
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  Securing land or applying for land in an approved industrial area or park;
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  Submitting the investment proposal through the prescribed state mechanism;
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  Obtaining appraisal by Invest UP and the concerned departments;
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  Receiving an approval, eligibility certificate or Letter of Comfort;
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  Obtaining all pharmaceutical, medical-device, environmental and factory approvals;
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  Completing the eligible investment;
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  Beginning commercial production within the approved period;
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  Submitting audited claims for capital, interest, certification or other assistance.

Invest UP provides investor facilitation, while land allotment may involve the Uttar Pradesh State Industrial Development Authority, the Yamuna Expressway Industrial Development Authority or another development authority.

A complete current public checklist covering every incentive was not identified in the official material reviewed. Applicants should obtain the latest implementation guidelines and claim forms before incurring expenditure.

Implementation and progress so far

Official government material identifies two major infrastructure initiatives associated with the sector:

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  A bulk-drug and pharmaceutical park in Lalitpur;
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  A medical-device park covering about 350 acres in Sector 28 of the Yamuna Expressway Industrial Development Authority region.

An official government update in May 2025 stated that the pharmaceutical sector had generated more than 70,000 jobs over three years. This is a government-reported sector-wide figure and should not be treated as employment generated solely under the 2023 policy.

The official sources reviewed did not provide a consolidated policy-specific table showing:

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  Applications received;
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  Projects approved;
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  Capital subsidy sanctioned;
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  Interest subsidy disbursed;
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  Units commencing production;
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  Pharmaceutical or medical-device output;
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  Investment realised;
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  Employment generated specifically under this policy.

How does the policy support Uttar Pradesh’s wider economic strategy?

The policy connects pharmaceutical manufacturing with industrial parks, research, medical devices, logistics and exports.

The Lalitpur project is intended to support bulk drugs, active pharmaceutical ingredients and upstream inputs. The Yamuna Expressway medical-device park is intended to provide a specialised manufacturing and testing ecosystem close to the National Capital Region, airports and logistics networks.

The policy also complements the Uttar Pradesh Industrial Investment and Employment Promotion Policy, the Export Promotion Policy and other investment frameworks. However, applicants cannot assume that benefits under different policies can be combined for the same expenditure.

Key challenges and limitations

Regulatory complexity: Pharmaceutical and medical-device projects require multiple licences, quality approvals and inspections.

High compliance costs: Clean rooms, laboratories, waste treatment, validation and certification can add materially to project cost.

Research risk: Product development and clinical research may not lead to regulatory approval or commercial success.

Infrastructure dependency: Bulk-drug and medical-device parks require reliable utilities, testing facilities and logistics.

Long reimbursement cycle: Many incentives require expenditure to be incurred and verified before payment.

Limited implementation disclosure: Consolidated policy-specific data on approvals and disbursements remain unavailable.

What businesses should keep in mind

Applicants should verify:

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  Whether the product is covered by the policy;
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  Whether the project is greenfield or an eligible expansion;
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  The definition of eligible investment;
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  Applicable drug or medical-device licences;
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  Environmental and waste-management obligations;
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  Land and park eligibility;
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  Capital and interest subsidy ceilings;
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  Clinical-trial and certification conditions;
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  Commercial-production deadlines;
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  Restrictions on claiming assistance under another state policy.

Eligibility and benefits remain subject to the notified policy, subsequent amendments, applicable government orders and approval by the competent authority.

FAQs

What is the policy’s main purpose?

It seeks to promote pharmaceutical, bulk-drug and medical-device manufacturing, research and industrial infrastructure in Uttar Pradesh.

What capital subsidy is available?

Eligible projects may receive 15 per cent of eligible investment, capped at Rs 200 crore and disbursed over five years.

Does the policy cover medical devices?

Yes. Eligible medical-device manufacturing units are covered along with pharmaceutical, bulk-drug and related projects.

Is research supported?

Yes. The policy includes support for research facilities, sponsored research, clinical trials, patents and quality certification.

Which department administers the policy?

The Food Safety and Drug Administration Department is the principal administrative department, with investor facilitation through Invest UP and relevant development authorities.

How long is the policy valid?

It remains effective for five years from June 8, 2023, unless amended or replaced earlier.

Are the Lalitpur and Yamuna Expressway parks already fully operational?

Official sources confirm that these parks are being promoted, but their exact construction, allotment and operational status should be verified from current project-specific government information.

Conclusion

The Uttar Pradesh Pharmaceutical and Medical Device Industry Policy, 2023 provides a broad package covering capital investment, financing, research, clinical trials, certification, environmental infrastructure and industrial parks.

Its principal capital subsidy is 15 per cent of eligible investment, capped at Rs 200 crore. The framework also offers interest, duty, research and quality-related support.

Its effectiveness will depend on timely implementation of the Lalitpur and Yamuna Expressway parks, regulatory clearances, environmental compliance and transparent disclosure of project approvals and incentive disbursement.

Sources

• 
  Uttar Pradesh Pharmaceutical and Medical Device Industry Policy, 2023, Food Safety and Drug Administration Department, Government of Uttar Pradesh; effective from June 8, 2023.
• 
  UP Pharmaceutical and Medical Device Policy, 2023 — policy and incentive page, Invest UP, Government of Uttar Pradesh.
• 
  Uttar Pradesh Pharmaceutical and Medical Device Industry Policy, 2023 — sector overview, Invest UP, Government of Uttar Pradesh; January 25, 2026.
• 
  Policy Highlights, Invest UP, Government of Uttar Pradesh; March 24, 2025.
• 
  Official update on pharmaceutical and medical-device parks, Invest UP, Government of Uttar Pradesh; October 21, 2023.
• 
  Official government update on pharmaceutical-sector employment, Invest UP, Government of Uttar Pradesh; May 24, 2025.