Maharashtra — Country’s apothecary


Mumbai is the capital of the pharmaceuticals industry and will remain so, said the Indian Drug Manufacturers Association’s Secretary-General, Mr Daara Patel, in a presentation at the Golden Maharashtra Summit, earlier this year.

In fact, Maharashtra is the foundation of the country’s pharmaceuticals industry as it is home, to globally recognised makers of affordable and quality generic medicine.

Naturally, it comes as no surprise that a chunk of the top ten pharmaceutical companies in the country are based in the State, he said.

However, competition is snapping away at its heels with neighbours, Gujarat and Goa, besides the southern States of Andhra Pradesh and Karnataka positioning themselves aggressively as tech-savvy, pro-science and research destinations.


And then are the tax and excise exemptions offered by industrially backward States such as Himachal Pradesh, Uttarakhand, Baddi, Jammu and Kashmir. These are resulting in a large number of industries shifting their manufacturing facilities to these parts of the country.

“Maharashtra’s contribution to the Indian pharma market is substantial: about Rs 19,000 crore out of Rs 59,000 crore,” said Mr Patel. The State is home to 347 bulk drug units, 693 formulation units and various manufacturing units. These include 17 large volume parenteral units, nine vaccine units, 1,931 loan licencees, and about 1,200 ayurvedic and cosmetics units.

Maharashtra also has 171 units approved, according to the World Health Organisation’s Good Manufacturing Practices (WHO-GMP) guidelines and 10 units approved by the United States Food and Drug Administration (USFDA).


The State attracts skilled and diverse manpower. Its real strength lies in the availability of diversely skilled manpower such as pharmaceutical research scientists in the field of pharmaceutics, pharmacology and pharmaceutical chemistry, pharmacists, microbiologists and analytical chemists along with management experts in manufacturing, marketing, finance, sales and human resource development. All these experts are available in Maharashtra on a par with international standards, says IDMA.


IDMA has around 750 members — large, medium and small national manufacturers inthe country.

Despite these advantages, if Maharashtra has still seen an erosion over the last decade, a key contributor is its real estate prices, observes Mr Muralidharan Nair, Partner with Ernst & Young.

While the southern States pitch themselves as more tech-friendly, Goa and Gujarat are competitive, with simplified ground rules allowing companies to come into their States and invest, he points out.

The Indian Pharmaceutical Alliance’s Mr D.G. Shah agrees that Mumbai being too expensive has taken its toll on the industry.

And while Gujarat is providing tough competition, also taking a piece of the cake are tax-free regions such as Baddi, Sikkim and so on. The IPA is a platform for large Indian drugmakers.


IDMA has identified key “speed-breakers” making the terrain difficult for the pharma industry to grow in Maharashtra. Issues such as octroi have still not been removed, and this is both money and time-consuming, says Mr Patel.

There are some labour policies, for instance, where medical representatives are seen as “workers” and as a result cannot be seen as supervisory staff, resulting in a different set of issues, he adds.

The pro-labour laws and attitude of the State Government has also played a part. “The Sales Promotion Employees (Conditions of Service) Act was amended to cover medical representatives and classify them as “workers” which no other State has done,” IDMA says.

On the flip side, Gujarat has proactive policies with a single-window clearance, balancing the interest of labour and industry and having facilities such as clusters where there are common effluent treatment plants, research and so on.

Further, IDMA points out that infrastructure and traffic problems are acute and progress is slow. This is forcing people to think of other States which are also more economical in terms of property costs/rentals, cost of living and overall business expenses including wages.

On the technical side, although the Maharashtra FDA is organised and has good technical hands, licences for new justified formulations (necessary for growth) are difficult whereas they are easily given in some other States, IDMA says.

The Maharashtra FDA should strengthen its technical wing and make judicious decisions instead of making manufacturers go to Delhi and other States.


Industry representatives have urged the State Government to be more proactive in terms of incentives, tax sops and investment in talent creation.

Echoing the sentiment of other industry segments, they say better infrastructure is the key to staying ahead — not just with other States — but with other advanced global economies.

“The influx of outsourced work from global companies has given the necessary impetus for the creation of Pharma Special Economic Zones (PSEZs), such as the one coming up in Nanded which would be one of the key drivers of outsourced pharma services growth in the coming future,” says IDMA.

The State should encourage the pharma industry to set up plants here, now that the tax/excise duty benefits in Himachal Pradesh, Uttarakhand, Jammu and Kashmir and so on, have been reduced. Maharashtra is a more attractive State for the pharma industry and companies will be eager to come back if the State offers attractive benefits, IDMA points out.

The State should also encourage clusters and common facilities such as the effluent treatment systems and so on. Though there are pharma clusters in Thane, Nashik and Aurangabad, more cluster-based projects must be encouraged by providing latest common facilities.

This will help the SME sector share costs and enhance quality, productivity and innovative capabilities, the IDMA suggests.

In fact, Maharashtra can reclaim its premier role as the torchbearer for the Indian pharma sector with a little help from the Government, industry representatives say.

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