Indian pharma companies are now viewing the concept of multi-locational facilities which come with a 10 year tax exemption allowing companies to get Return On Investment (ROI) in the shortest possible time. This is where over a dozen leading pharma majors have taken a decision to set base at Sikkim to maximize the benefits of the new North-East Industrial and Investment Promotion Policy (NEIIPP), 2007.

The government of India’s Income tax waiver for 10-years allows companies to get their return on investment in a shortest stipulated period.

Today, Sikkim is home to as many as 14 major pharma companies, which have significant investments in the state. These include the who’s who of Indian pharma sector such as Cipla, Sun, Zydus Cadila, Alembic, IPCA, Alkem, Intas, Torrent, Unichem and Micro Labs among others who have taken a decision to set up a facility at Sikkim to maximize the monetary benefits. These companies have multi location plants preventing over dependence on one site.

“The new North-East Industrial and Investment Promotion Policy, 2007 is highly beneficial for pharma Investments in Sikkim. The State is not known for issues like labour unrest. The pollution free atmosphere is absolutely conducive to pharma investment. There could not have been a better situation,” said Prof. Prakash V Mallya, director, Centre for Pharmaceutical Professional Advancement, Krupanidhi Institutions, Bangalore.

The big advantage that companies are viewing in Sikkim is the ability to be able to invest in a Greenfield project complying to Good Manufacturing Practice(GMP). The design concepts for GMP can be incorporated the latest technology and equipment in the beginning itself, thus avoiding the problem of trying to change the traditional plant design.

According Kaushik Desai, chairman, Industrial Pharmacy Division, Indian Pharmaceutical Association, although the logistics and access to trained manpower are an issue, pharma majors have opted to invest in Sikkim. This is because of financial gains, they can garner from these investments at a faster pace from tax savings.

 “What we are seeing now in Sikkim is that pharma companies are shifting the production of lucrative products to this region. In the long run they will be able to take full advantage of profits earned out of tax saving, stated a senior pharma consultant. Pharma manufacture needs the support of ancillary units like packaging, access to raw materials, components, machinery etc. In a few months from now, ancillary industries are also bound to set their base here.

Right now, the picturesque mountainous state is known for its tourism industry which is the key revenue generator for the state exchequer. A challenge for pharma companies here is to locate a flat land to set up a production unit. There is only one pharmacy college which companies will need to approach for candidates and invest in training. Despite these hiccups, the pharma sector has thought of investing here as an attempt to gain as much profit from a mature market, stated the consultant.