Tamil Nadu, which has been losing out to neighbouring states in its position among the major pharma manufacturing hubs, is expected to launch a new pharmaceutical manufacturing policy to attract the industry.
This is at a time when the Goods and Services Tax (GST) implementation has almost removed the additional benefits the tax haven states like Himachal Pradesh has been offering to the manufacturers, say industry representatives from the state. Besides, the state has also been subject to criticism for losing out to neighbouring states in its strongholds including the automobile sector.
"We would like the pharmaceutical industry in the state to come up with suggestions so that we can attract more pharma industry to the state. We can come up with a Pharmaceutical Industry Policy, based on the industry submission," said K Gnanadesikan, Addiional Chief Secretary to Government, Industries Department, Tamil Nadu. He was addressing the industry representatives in Pharmac South, an industry meeting organised by Indian Drug Manufacturers Association (IDMA) in Chennai.
He sought the association leaders to communicate the state's proposal with the larger pharmaceutical companies, informing that the projects over Rs 3 billion could be provided with special incentive package, as it is offered for industries including the automotive sector. For the small and medium manufacturers, the option could be to form a group to seek land with the government.
The industry representatives said that this is a welcome move and along with the level playing field coming into the country with the implementation of GST, this could help the state to inch up its position among the to pharmaceutical manufacturing destinations.
The state, which was earlier one amongst the top four manufacturing States in the pharma sector and has been pushed to the fifth position now, after Gujarat, Maharashtra, Andhra Pradesh and Karnataka. The industry is also taking a note of what has been done in Gujarat and Karnataka to support the growth and take a cue from there, said S V Veerramani, immediate past president of IDMA.
Earlier, the drug manufacturers were flocking to the tax haven states like Himachal Pradesh, to set up their manufacturing units as it has offered benefits compared to the units in other parts of the country.
"With the GST implementation, the duty benefit the units in these tax havens is only around two per cent and the exise duty benefit is also expected to be over in near future, there is level playing field for the manufacturing industry now," he said.
Gujarat, for example, has seen around 100 units being set up in the recent past, he said. More companies are expected to expand in other parts of the country, rather than expanding in the tax havens.
"If we are able to get some support from the government, we can definitely be back to the fourth position, though Karnataka is also growing aggressively," said Veerramani.
The industry is looking at government support in terms of taking over land, apart from power and other subsidies, state GST incentives etc.