Published: October 2026 | Updated: October 2026
A new funding opportunity has opened for Indian startups and MSMEs working on early-stage pharmaceutical innovation.
The Department of Pharmaceuticals has announced a New Discovery Track under the Promotion of Research and Innovation in Pharma & MedTech (PRIP) Scheme, offering financial assistance of up to ₹50 crore per company, project or portfolio of projects.
However, the ₹50 crore headline needs an important clarification.
This is not a general ₹50 crore startup loan or grant. The new Discovery Track is specifically designed for eligible startups and MSMEs undertaking New Chemical Entity (NCE) or New Biological Entity (NBE) projects at Technology Readiness Levels (TRL) 1, 2 or 3.
The scheme also requires a minimum 25% co-funding from bona fide institutional investors. The government says the track is intended to address the funding gap faced by early-stage novel drug discovery projects and help promising innovations progress towards clinical development.
The Promotion of Research and Innovation in Pharma & MedTech (PRIP) is a Government of India scheme administered by the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers.
The overall PRIP scheme has a financial outlay of ₹5,000 crore and aims to strengthen India’s pharmaceutical and MedTech research and development ecosystem.
Its objectives include supporting drug discovery and development, encouraging medical-device innovation, promoting industry-academia collaboration and helping move India’s pharmaceutical sector towards innovation-driven growth.
The newly announced Discovery Track specifically addresses the early and high-risk part of the drug-development journey.
According to the Department of Pharmaceuticals, the track is intended to encourage startups and MSMEs to enter the high-risk innovation ecosystem for the discovery of new drugs and therapies.
Under the new Discovery Track:
| Particular | Details |
|---|---|
| Maximum financial assistance | Up to ₹50 crore |
| Eligible applicants | Startups and MSMEs |
| Eligible projects | NCE/NBE projects |
| Starting TRL | TRL 1, 2 or 3 |
| Supported progression | Up to TRL 6 |
| Investor contribution | Minimum 25% co-funding |
| Overall PRIP outlay | ₹5,000 crore |
| Application | Online through PRIP portal |
The ₹50 crore assistance is stated as being available per company/project/portfolio of projects, subject to the scheme’s conditions and the required institutional-investor co-funding.
A startup should not interpret the announcement as:
“Register as a startup and receive ₹50 crore.”
That is not how the programme works.
The project must fall within the specified innovation category and technology-readiness stage, satisfy the applicable scheme requirements and go through the PRIP evaluation process.
The requirement for minimum 25% co-funding from bona fide institutional investors is particularly important.
The new track is specifically aimed at:
that are undertaking:
at:
The Department says supported projects can progress to higher technology-readiness levels, not beyond TRL 6.
This means the track is aimed at relatively early-stage innovation rather than an already commercial pharmaceutical product.
These terms are important because not every pharmaceutical business will qualify for the Discovery Track.
An NCE broadly refers to a new chemical pharmaceutical substance being developed as a potential medicine.
An NBE refers to a new biological product or therapeutic entity being developed as a potential medicine.
The PRIP priority areas also include phytopharmaceutical drugs, complex generics, biosimilars and novel medical devices under the wider second call, although the new ₹50 crore Discovery Track itself is specifically described for NCE/NBE projects at TRL 1–3.
One of the biggest difficulties for entrepreneurs reading government innovation schemes is understanding Technology Readiness Level (TRL).
In simple terms, the TRL system is used to describe how far a technology has progressed from an early scientific concept towards practical application.
For the Discovery Track, applicants must have projects at TRL 1, 2 or 3 at the relevant starting point.
A simplified explanation is:
| TRL | Simple meaning |
|---|---|
| TRL 1 | Basic scientific principles have been observed |
| TRL 2 | The technology concept has been formulated |
| TRL 3 | Experimental proof of concept has been demonstrated |
The official PRIP documents should be used to determine the exact classification of a particular project. The simplified table above is intended only to help readers understand the concept.
The important point is that the Discovery Track is aimed at early-stage innovation, not simply at companies that already have a commercially established medicine.
This is probably the most important part of the announcement for founders to understand.
The government says financial assistance under the new Discovery Track is subject to a minimum co-funding of 25% of the project cost from bona fide institutional investors.
In other words, the programme is designed to bring government support and institutional private capital together.
Suppose an eligible project has an approved project cost of ₹40 crore.
A 25% co-funding requirement would represent:
₹40 crore × 25% = ₹10 crore
So, in a simple illustration, at least ₹10 crore would need to come from the qualifying institutional-investor side.
This is only an illustration. It should not be interpreted as a guarantee that the government will fund the remaining ₹30 crore or that every approved project will have this exact funding structure.
The actual assistance will depend on the approved project, applicable scheme rules and evaluation.
Drug discovery is one of the most capital-intensive and risky areas of innovation.
A company may have promising scientific research long before it has a commercially viable medicine.
This creates a difficult funding gap:
Scientific discovery → Proof of concept → Further development → Clinical development → Commercialisation
Early-stage projects can struggle to attract sufficient private capital because the technological and commercial risks are still high.
The Department of Pharmaceuticals says the new Discovery Track is intended to address this early-stage funding gap and catalyse participation by institutional investors earlier in the drug-development process.
The broader objective is to help more indigenous NCE and NBE assets progress from discovery towards clinical development and contribute to a stronger pharmaceutical innovation pipeline in India.
The second PRIP call contains different tracks.
Understanding the difference is important because a startup at TRL 1 is not necessarily in the same category as a company already at TRL 5.
Designed for:
Startups and MSMEs
undertaking:
NCE/NBE projects at TRL 1, 2 or 3
with progression supported up to TRL 6.
Financial assistance:
Up to ₹50 crore
with a minimum 25% institutional-investor co-funding requirement.
This track is for startups and MSMEs undertaking projects at TRL 1, 2 or 3, with the objective of taking them to higher TRLs not beyond TRL 5.
Financial assistance is up to ₹5 crore per project.
For approved project costs up to ₹1 crore, the scheme says no co-funding from the applicant is required.
For project costs above ₹1 crore, the applicant co-funds half of the amount exceeding ₹1 crore, according to the government announcement.
The Later Stage Track covers projects at TRL 4, 5 or 6 that are being taken to higher TRLs.
Financial assistance is available up to:
₹100 crore per project
subject to a maximum of 35% of the approved total project cost, with the remaining amount co-funded by the applicant.
| Track | Starting stage | Maximum assistance |
|---|---|---|
| New Discovery | NCE/NBE, TRL 1–3 | ₹50 crore |
| Early Stage | TRL 1–3 | ₹5 crore |
| Later Stage | TRL 4–6 | ₹100 crore |
Always check the current official PRIP guidelines before deciding which category applies to a specific project.
The second PRIP call is broader than the new Discovery Track.
The government has identified three priority areas:
Including:
The government’s earlier second-call announcement also identifies areas such as AI/ML-based medical devices, software as a medical device, medical diagnostics, robotic medical devices, telemedicine-enabled devices and innovative in-vitro diagnostic devices within the novel medical-device priority area.
Therefore, entrepreneurs should not assume that the ₹50 crore Discovery Track is the only opportunity under PRIP.
Different projects may fall into different tracks.
There is already evidence of substantial activity under the first PRIP call.
On 30 September 2026, the government announced that 41 projects had been approved under the first call for around ₹1,600 crore in financial assistance.
These projects are expected to catalyse an additional ₹3,020 crore of private investment, taking the total R&D investment across the approved projects to approximately ₹4,620 crore.
Of the 41 approved projects:
By priority area:
This provides some useful context: PRIP is not merely a newly announced funding concept; projects have already been approved under the first call.
The first approved portfolio provides an indication of the type of innovation the government wants to encourage.
The government says supported projects include areas such as:
The portfolio also includes projects addressing strategic public-health priorities such as antimicrobial resistance, rare diseases, neglected tropical diseases, outbreak/pandemic threats and vaccines.
The official PRIP portal is open for the second call.
There is an important procedural change for early-stage and Discovery Track applicants.
The Department of Pharmaceuticals currently states that applicants under the Early Stage Track and NCE/NBE Discovery Track must follow a two-step application process:
The applicant first submits a short concept note.
Shortlisted applicants are then invited to submit a detailed application.
For Later Stage projects, the existing detailed-application process continues.
This means a founder interested in the Discovery Track should not simply prepare a generic funding proposal and assume that the process is the same as a conventional business loan application.
The official PRIP portal provides several resources, including:
Applicants should read the applicable documents carefully before submitting anything.
PRIP Official Portal — Department of Pharmaceuticals
Official PRIP Scheme & Guidelines
There is another important point for previous applicants.
The government has advised applicants who submitted projects under PRIP Round 1 not to resubmit the same project. The Department says evaluation of the remaining applications from the first round is continuing.
So existing applicants should carefully check their status and the current instructions rather than automatically submitting the same proposal again.
This is an important question, but the safest answer is:
Do not treat PRIP as a conventional bank loan or ordinary startup equity round.
It is a government financial-assistance mechanism under a research and innovation scheme, subject to project eligibility, evaluation and scheme conditions.
The ₹50 crore headline also does not mean that every eligible company receives ₹50 crore.
The amount of support for an approved project depends on the applicable scheme framework and project evaluation.
Applicants should rely on the current PRIP guidelines and application documents for the precise financial and contractual conditions.
The Discovery Track may be particularly relevant to startups and MSMEs that are:
It is not designed as a general-purpose financing programme for every pharmaceutical MSME.
A pharmaceutical distributor, ordinary trader or company seeking working capital for inventory should not assume that this programme applies to its business merely because it is an MSME.
The first question should be:
Does my project actually fit the Discovery Track?
The Discovery Track specifically targets NCE/NBE projects at TRL 1–3.
You need to understand the institutional-investor co-funding requirement before building your funding plan.
The scheme guidelines, concept-note guidance, FAQs and applicant toolkit contain the detailed requirements.
This is an R&D innovation-support programme, not conventional working-capital finance.
India has a large pharmaceutical manufacturing base, but moving further up the value chain requires stronger domestic innovation and drug-discovery capabilities.
The new Discovery Track attempts to address one of the most difficult parts of this journey: financing promising innovation before it becomes commercially proven.
The government’s approach combines public financial support with institutional-investor participation.
If implemented effectively, such a model could help promising Indian startups and MSMEs take high-risk pharmaceutical research further along the development pathway.
The first PRIP round already shows substantial government and expected private investment flowing into pharma and MedTech R&D projects.
No. The new Discovery Track is specifically for eligible startups and MSMEs undertaking qualifying NCE/NBE projects at TRL 1, 2 or 3.
No. ₹50 crore is the maximum stated financial assistance, subject to eligibility, project evaluation and scheme conditions.
Yes. The government announcement specifies a minimum 25% co-funding from bona fide institutional investors for the Discovery Track.
NCE means New Chemical Entity.
NBE means New Biological Entity.
The Discovery Track is for NCE/NBE projects at TRL 1, 2 or 3, with support intended to take them to higher TRLs not beyond TRL 6.
No. The wider PRIP scheme also covers areas including complex generics, biosimilars and novel medical devices.
The government has advised applicants who submitted projects under Round 1 not to resubmit the same project.
Applications are submitted through the official PRIP portal:
TRL 1–3
with support intended to take them towards:
TRL 6
and with:
minimum 25% co-funding from bona fide institutional investors.
For a startup or MSME developing a genuinely novel pharmaceutical technology, this could provide an important source of risk capital at a stage where conventional financing can be difficult.
But eligibility should be established from the official PRIP scheme documents—not from the ₹50 crore headline alone.
Editorial Disclaimer: This article is intended for general information and educational purposes. BusinessZindagi has compiled and explained the information using official government sources and publicly available scheme documents. Eligibility, funding amount, project approval, co-funding requirements, application procedure and other conditions are subject to the applicable PRIP scheme, guidelines, application documents and decisions of the competent authorities. Applicants should verify the latest information directly with the Department of Pharmaceuticals and the official PRIP portal before making any application or financial decision.
AI-Assisted Content: This article was prepared with the assistance of artificial intelligence for research organisation, drafting and editorial structuring. The factual information has been checked against the cited official government sources available at the time of publication. Readers should refer to the latest official notifications, scheme guidelines and PRIP portal for authoritative and updated information. BusinessZindagi does not guarantee eligibility, approval or receipt of any financial assistance under the PRIP Scheme.
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