Despite having a lot of resources and abundant opportunities, mainly due to inadequate government initiatives, the pharma sector in the North is lagging. The so-called excise-free zones are losing sheen and loan-licensing is getting less attractive under the burden of technology upgradation.
According to P.V.Appaji, Director General of Pharmaceutical Export Promotion Council of India (Pharmexcil),when compared to South India, the pharma sector in North India is lagging. Except for Baddi during the tax incentive regime, the north Indian pharma sector had failed to keep pace with its southern counterparts. After the tax regime is over, many companies which have moved from south and other parts of the country are now slowing shifting back to their places of origin, because of the lack of government initiatives,” said Appaji.
However the recent changes in the political landscape of India have given a new ray of hope to all sectors of the Indian industry. Some of the major and medium players in the North India are riding on the hope that the pro -active moves by the central government to have its resonance in the pharma sector too.
With the Prime Minister of India, Narendra Modi, vociferously campaigning for ‘Make in India’ and trying to attract foreign and domestic investments in areas of innovation and new discoveries, the pharmaceutical and biotechnology industry in the country in general and north India in particular is hopeful of encouraging initiatives in the days ahead by the central and state governments to propel the industry on the growth trajectory.
Says Appaji, "With the central government giving priority to industrial sector, business leaders are hopeful that ‘Make in India’ will help the pharma industry also to surge ahead on the growth path".
For pharmaceutical sector, India is already in the forefront and has achieved the distinction of ‘Make in India’ long back. “We are proud to say that out of 90 per cent medicines manufactured in India, about 50 per cent are being supplied to the world across different countries. In pharma , we have already achieved ‘Make in India’ long back, but what we are expecting is the government initiatives to attract more Western investors of patented and innovator products to establish their facilities and encourage them to manufacture within the country instead of exporting to India from their country,” added Appaji.
Industry leaders are optimistic that with ‘Make in India’ initiative by the central government, India will definitely become the global hub for pharmaceutical manufacture. The pharma sector in the North can also take advantage of this initiative by the central government and cash in on the upcoming opportunities, they feel.
Many of the CEOs of the national as well as global corporates are now upbeat on the prospects of the Indian industry. “Pro - active moves by the new government at Centre have instilled the much needed confidence among the industrialist in the country. This will lead to a desirable change in the sentiment at the institutional level and the government level,” said Krishna Prasad, CEO and MD of Cito Healthcare.
“With many policy initiatives likely to be taken by the government, North India will definitely improve its pharma base. Many of the MNCs are now betting on India. India is now the best-placed economy among global investment destinations as it emerges from a decade low slump to ride a wave of enthusiasm generated by the Prime Minister's image as a leader focused on execution,” said Prasad.
Of late, the government of India has taken many initiatives in terms of improving the Active Pharmaceutical ingredients manufacturing base in the country. “To contain India’s over -dependence on the Chinese API imports; government of India has taken certain visible steps and has also declared 2015 as Year of API sector. This apart, the Department of Pharmaceuticals (DoP) and the Department of Commerce and Industry (DoCI) are taking steps to encourage small and medium entrepreneurs (SMEs) and have even come forward to build essential common infrastructure facilities like common effluent treatment plants, incubation centres, testing and research laboratories and providing training and skill development for the entrepreneurs,” said Appaji.
With many such positive initiatives, industry players are hopeful of a bright future for the Indian pharma industry. They are confident that they can avail of a windfall from the vast number of patented drugs going out of the patent basket in the near future since they are among the leading generic players in the country.
Moreover the new drug policy which is due will not only help the growth of the generic drugs, but also is expected to boost the contract manufacturing business of a vast number of small and medium scale units.
The biggest strength of North India is that Delhi will remain as the most vital centre of regulatory network as far as the pharma industry is concerned. The activities, if not manufacturing or exporting, will continue in North India which was one of the most promising regions for the industry till some time back. And North India is still important for the pharma players as states like Uttar Pradesh, Delhi, Punjab and Haryana will continue to be major markets of consumption, thanks to the demographic and geographic strength of the region.
Concerns of North Indian pharma
Despite the hopes for a better future, a major concern for north India is that the excise-free zones are not as lucrative as before. Loan-licensing is facing stiff competition and small scale units are gasping for breath as there is not much help from the government. Post tax incentive regime, North India is losing its sheen as a happening place for pharma industry. Particularly the SME sector is most hit as they are less capital intensive and vulnerable to taxation.