Road to recovery: Gujarat's pharma share rises to 30%

State's contribution had tanked below 20% from 42% in last two years.

After facing tough times on account of various pharma units migrating to tax havens states in North, Gujarat has bounced back by regaining its lost share in the pharma market of the country. The contribution of the state in total production of drugs and formulations in the country has once again surged to 30 per cent, which had tanked to less than 20 per cent in past couple of years.

Gujarat had seen exodus of many pharmaceutical units to tax exempted states such as Baddi in Himachal Pradesh as pharma is a very cost sensitive business. The migration of units led to sharp decline in Gujarat's share in pharma market. Its contribution had plummeted below 20 per cent from earlier 42 per cent.

"Gujarat did see migration of units operating in pharma sector and there is no denial of that. However, the reversal has already started. We have been able to re-captured one third of India's drugs and formulations market," said Jaynarayan Vyas, minister of health and family welfare, Gujarat government said while announcing 61 Indian Pharmaceutical Congress' mega event to be held in Ahmedabad during December.

Citing reasons for reverse trend, he added that majority of pharma units fled to tax heavens to avail of tax benefits. The excise duty has now come down from 16 per cent to 4 per cent, which has narrowed down the cost difference.

"Skilled and trained workforce is yet another advantage of Gujarat. Also, Gujarat has set a kind tradition for producing quality drugs and formulations", he added.

The fact that Gujarat has better workforce could be guaged from the fact that in a quality check carried out by Food and Drug Commissionerate of Gujarat in 2007-08 and 2006-07 around 25 per cent samples of the drugs and medicines marketed in Gujarat by Himachal Pradesh-based were found to be of sub standard quality.

The minister also exuded confidence that Gujarat would regain 35 per cent to 40 per cent share of India's pharma market.