Gujarat Expects Its Share In Pharma Output To Claw Back To 40%

With scores of new investors queuing up to open their plants, the share of Gujarat in the country’s drug production is expected to touch 40 percent from 33 percent now over the next couple of years.

One of the main reasons for renewed interest among pharma companies to come back to the state is the Goods and Services Tax which has provided a level-playing field for the state, HG Koshia, commissioner, Gujarat Food and Drug Control Administration, said.

“There was a time when Gujarat used to produce over 45 percent of drugs manufactured in the country. But, the problem began a decade back when some states offered tax exemption to woo investments, following which many firms migrated to such tax-free states,” Koshia explained.

“However, the table has now turned as the 10-year-tax holiday offered by those states is coming to an end. Moreover, GST has leveled the playing field, as taxes are now common in all the states,” he said.

He further said the plant approval committee has cleared plant designs for around 300 new facilities in recent months and it is getting four-five applications every week.

He said it takes around two years to set up a new facility but with such a large number of companies showing interest, the state expects to regain its lost glory in the pharma sector in a couple of years.