The industrial policy approved by the Kerala Government has included Ayurvedic medicines and biotechnology among the priority sectors of investment, a decision potent to catapult the drug manufacturing industry in the state, according to sources.

As per the new industrial policy approved by the cabinet yesterday, liberal incentives are offered to investors in Ayurvedic medicines, biotechnology, information technology, rubber based industries, agro-industries, food processing, seafood and light engineering segments.

Sources note that the incentives offered to these sectors are on par with the incentives offered by the neighboring states of Tamilnadu and Karnataka. The Government offers 15 per cent of the project cost or Rs.15 lakh as subsidy to new investments in these sectors, including for diversification to set up new units. The subsidy for units coming up in the districts of Wyanad and Idukki is at Rs.25 lakhs or 25 per cent of the project cost.

Any new firm coming up in the Government promoted industrial parks has been exempted from stamp duty and registration fees. Further, these units have been exempted from power tariff revision up to March 2006, and power will be offered at a low cost in comparison to neighboring states.

Ayurvedic industry sources said the decision could usher in a new era for the fragmented Ayurvedic industry in the state, so far dominated by a dozen odd traditional Ayurvedic houses mainly into treatment segment, rather than venturing into largescale drug manufacturing. The policy may pave way for setting up of new manufacturing units and a new breed of entrepreneurs, tapping global markets with novel and value added herbal products.

The existing players may get opportunity to rope in joint ventures with established drug houses that eye firms with traditional knowledge and potential, leading to global standard herbal drug development. The policy has also placed biotechnology among the priority list, and leveraging the Ayurvedic tradition of the state, firms in this sector could research to develop world-class drugs. Most importantly, the decision will help in modernization of the industry in the state. So far, the Government had not been offering any special incentives to the Ayurvedic industry, except for some benefits common to all SSI units, say sources.

Sources also note that the policy is good to attract investments to the proposed Kinfra promoted SSI Park near Thumpa with emphasis for pharmaceutical firms, and to the herbal village and R&D centre planned at Wyanad and Idukki districts. The policy offers a special subsidy of 25 percent or Rs.25 lakh for the new investments in priority sectors in these districts.

The 200 odd Ayurvedic clinics and Panchakarma centres in the field of health tourism also may benefit with the policy as the state has accorded industry status to tourism, hope industry sources.