Govt considers 1-Year extension for small pharma firms ahead of Schedule M 2026 rollout
NEW DELHI : The Government is considering granting a one-year extension to thousands of small pharmaceutical manufacturers struggling to comply with stricter quality norms, according to two government officials familiar with the matter.
The deliberations come ahead of the January 1, 2026 rollout of the revised Schedule M good manufacturing practices (GMP), aligned with World Health Organization standards.
The Union health and family welfare ministry is scheduled to begin consultations with state governments on the issue from Monday, one of the officials said, reported HT.
Low Compliance Raises Industry Disruption Risks
Officials said low compliance among small and medium enterprises (MSMEs) in the pharmaceutical sector could lead to widespread plant closures and supply disruptions in India’s USD 50-billion pharmaceutical industry, a major global supplier of generic medicines.
The revised Schedule M deadline had earlier been extended from January 1, 2025.
The latest proposal would apply to MSMEs with annual revenues of Rs 250 crore or less, amid concerns that fewer than a third of such units have submitted their upgrade plans, exposing the remainder to potential penalties and shutdowns.
India has about 10,500 drug manufacturing units, of which nearly 8,500 fall under the MSME category.
These units account for roughly 70 per cent of the country’s generic drug production and face estimated upgrade costs of Rs 10–15 crore per facility. Of the 8,500 MSMEs, around 2,000 have already complied with the revised quality norms.
“Out of these 6,500 MSME drug firms, only 1,400 (21.53 per cent) have submitted the necessary upgrade plans to the government,” said one of the officials, requesting anonymity.
Inspections and Structural Constraints
Another official said the issue is under active consideration at the central government level, as states and Union Territories are expected to begin risk-based inspections of manufacturing plants from January 1, 2026. Himachal Pradesh and Uttarakhand have already initiated inspections, the official added.
Government officials said MSME manufacturers have flagged practical challenges in meeting the revised norms, particularly the need for structural changes to plant layouts.
While many firms intend to comply, constraints such as limited space for expansion and the inability to reconfigure existing facilities to meet new workflow requirements remain key concerns.