The central government's special package for industries in Himachal Pradesh seems to have found favour with domestic pharmaceutical sector if the number of new drug manufacturing facilities coming up in the state is any indication. Ever since the centre and the state government announced pharmaceutical industry as a priority sector, there has been tremendous interest from the companies to set shop in the state. About 20 new WHO-GMP compliant drug-manufacturing facilities are in various stages of implementation in Baddi and adjacent areas alone, it is learnt.

While many of the Chandigarh based companies have identified Himachal Pradesh as their natural choice for setting up additional units, domestic pharma majors from other parts of the country are also finding it attractive to have their expansion programmes based in the state. While Panacea Biotech and Alembic are some of the drug companies who have already begun construction of the production facilities, companies like Dr Reddy's and Cipla are planning to follow suit in near future.

Speaking to Pharmabiz.com, Vijay Batra, managing director, Adley Labs Ltd, Chandigarh said that the tax incentives announced by the government as part of the special central scheme is the major reason for the attraction towards Himachal Pradesh. Batra is one of the pioneering entrepreneurs who decided to have his new production facility in the HP. Admac Pharma Limited, also part of Adley Group is also coming up with a state-of-the-art manufacturing facility in the region, he informed. Adley unit meant for the production of parentals, syrups, capsules etc is coming up with an investment of Rs 15 crore. Batra expected the new unit to begin functioning in another six months time.

The central excise had in a notification dated June 10, 2003 exempted new units that are handling 18 scheduled categories of goods from the whole of the duty of excise or additional duty of excise. Pharmaceutical products are one of the major items, which have been listed in the schedule.

In addition to this, the department of industrial policy and promotion had, during the previous year announced capital investment subsidy for all new units coming up in specific locations of the state. The government has subsidized 15 per cent of the investment made by the company in plant & machinery, subject to a ceiling of Rs.30 lakh. The existing units will also be entitled to this subsidy on their substantial expansion, as defined.

The new initiatives have provided the required incentives for infrastructure development, financial concessions and are also to provide easy market access, as well as an enabling environment for industrial development.

While the drug companies agree with the state government claims like competitive package of initiatives, power at competitive prices and pollution free environment, they find that there is much to be done to improve the labour union issues. But for the labour unrest, everything else is fine in HP, they feel. The state may soon turn to be the most preferred destination for drug industries in the country when it comes to future expansions.