Govt offers startups up to ₹ 50 cr for new drug discovery under pharma scheme

New Delhi: India’s Ministry of Pharma has invited applications for the second round of its Promotion of Research and Innovation in Pharma & MedTech (PRIP) programme, which offers startups and micro, small and medium enterprises (MSMEs) up to ₹50 crore each for the discovery of new drugs, the government said on Thursday.

The PRIP scheme has a total financial outlay of ₹5,000 crore ₹5000 crores, inclusive ₹700 crore for setting up Centers of Excellence (CoEs) in seven National Institutes of Pharmaceutical Education & Research (NIPERs), and ₹4,200 crore to accelerate investment in the R&D ecosystem within the industry. The initiative will run until the financial year 2029-30.

The government highlighted the purpose of this second round of funding, saying: “The second call offers a new opportunity for eligible industry, start-ups and SMEs to carry out high-potential research and innovation in the pharmaceutical and MedTech sectors.”

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“The second call covers three priority areas: new medicines – including new chemical entities (NCEs), new biological entities (NBEs) and phytopharmaceuticals; complex generics and biosimilars; and new medical devices,” the government said in a statement.

The first call under PRIP, announced on September 30, 2026, was approved approx ₹Financial assistance in the amount of 1,600 million crowns for 41 innovative projects. It is assumed that this subsidy will be drawn ₹3,020 crore in private co-financing, mobilization is estimated ₹4,620 million in total investment in R&D in pharma and MedTech.

The newly added Discovery Track in the second round was created to address the funding gaps that small firms face when transitioning from basic laboratory research to advanced experimental stages.

The Government highlighted the distinct focus of this new window: “While the Early Stage Track provides support for a wider range of early stage PRIP projects, the new Discovery Track is specifically structured to provide greater and sustained support to Indigenous NCE and NBE drug discovery programs while bringing institutional capital to the development track.

According to the department, the pathway supports early-stage drug development involving chemical and biological entities and helps advance them to advanced stages of prototypes and animal testing. To receive this grant, applicant companies must secure at least 25% of their total project expenditure from bona fide institutional investors.

Alongside the Discovery Track, the department structured the second call into two additional funding tiers determined by the technical maturity of each project.

The initial stage is open to start-ups and smaller companies working on early laboratory research in all three priority sectors. This track offers financial assistance up to ₹5 million per project to help technologies reach the prototype stage. For projects with approved costs up to ₹1 million, the government will provide the entire amount without requiring financial contributions from the applicant. If the project budget is exceeded ₹1 crore, the applicant has to contribute half of the amount which is above this limit.

The later stage track is open to larger industry players, startups and smaller businesses that already have working prototypes or early experimental data. This track offers support up to ₹100 crore per project to help candidates get through the formal testing phases. The Department limits funding under this tier to 35% of the approved total project cost, with the applicant responsible for funding the remaining 65%.

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The ministry said applicants must ensure that the development goals and objectives of their proposals can be achieved within the life of the scheme, which ends in 2029-30. Projects that require a longer overall development cycle remain eligible to apply, but funding will only cover milestones planned for completion before the end of the period.

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The department has set November 10, 2026 as the deadline for all applications under the second call. A specialized committee will review and evaluate received proposals according to a regular schedule based on verified evidence of project readiness, development schedule and compliance with the co-financing criteria specified in the official guidelines.