Piyush Pandey in Ahmedabad | April 12, 2005 09:50 IST
Source: Rediff News

Gujarat's loss appears to be Himachal's gain. Around 182 small,
medium and large pharmaceutical companies have shifted base to
Himachal Pradesh over the past two years from Gujarat.
The extent of this migration is magnified by the fact that over 50
per cent of all the pharmaceutical companies that have shifted to HP
are from Gujarat.

Clearly, pharmaceutical companies see a huge cost advantage in
shifting base to HP, where there is a tax holiday till March 2007. In
contrast, only Kutch in Gujarat offers tax holiday. But the too will
end on December 31, 2005.

HP is becoming a hub for pharmaceuticals manufacturing companies,
with over 300 pharma firms setting up units there.

Pharmaceuticals companies waiting in the wings to set up units in HP
includes majors such as Ranbaxy, Cipla, Dr Reddy's, Nicolos Piramal
and Dabur, among others.

Even the Gujarat-based Alembic, Zydus Cadila, Cadila Pharmaceuticals,
Intas Pharmaceuticals, Torrent Pharmaceuticals and Paras
Pharmaceuticals are also planing to set up units in HP.

"Himachal Predesh is emerging as the pharmaceutical manufacturing hub
of the country. Almost all the leading pharma majors has set up their
units in our state or is in process of setting of units. Most of the
pharma companies setting up unit in our state are from Gujarat."
Vibhadra Singh, chief minister of Himachal Pradesh told Business
Standard on Monday.

The pharma majors' are moving into HP to cash in on the special
incentive package announced by the Centre, which include income tax
holiday and excise duty concessions for specified periods, and
investment subsidy on plant and machinery.

Central transport subsidy is already being provided for five years to
the industrial units. Singh said that giving tax holidays is not to
make other states uncompetitive. "We are not forcing these companies
to set up shops in our state, we are just inviting them because of
our competitive advantage."

The central government incentive package has been supplemented by the
state government's special package announced in the state's
industrial policy.

"We are sure no other states provide these facilities, which HP does
and these packages are effective enough to help create congenial
investment climate in our state and attractive enough in motivating
the companies to invest in HP," said Singh.