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PHARMACEUTICAL INDUSTRY IN GUJARAT STATE
Growth of Pharma Industry in Gujarat-Recent Trends: Gujarat has been playing a major role not only in the sphere of production of drugs and pharmaceuticals, thus catering to the growing domestic demand, but also in earning valuable foreign exchange. At present, the state accounts for about 46 per cent of the total national production and 17 per cent of exports. As explained above, the industry has grown substantially over the last two decades deriving inspiration from the splendid performance of local units and cashing in on the policies and facilities available. A number of young entrepreneurs of Gujarat have taken to this industry in the subsequent years.
A major factor that helped the industry in the state is an early development of certain crucial linkages. Thus, technical training institutions like LMCP since 1947 and the Bombay College since 1960s groomed pharmacists with a professional approach. Machinery manufacturers like CADMACH took care of the industry's need for crucial capital goods.
Number of Units: It is estimated that there are around 75-100 bulk drug producers and 1000 manufacturing units mostly in formulations and other areas including excipients, disposables, homeopathic, ISM and miscellaneous products under the purview of FDCA. Of these ten are large, 50 are medium and the rest are small units . It is estimated that there are 7 big firms (Cadila Pharma, Zydus Cadila, Sun Pharma, Torrent, Core, Alembic, Sarabhai, etc.), 30 medium sized units and the rest are small units in Ahmedabad and Vadodara. Several plants are located in Gujarat whose head quarters are elsewhere (eg- Wockhardt, Lupin etc.)
Investment: The structural characteristics of the pharma sector in the state have undergone significant changes over the three decades between the 1970s and 2000s. The statistics published in the Annual Survey of Industries (hereafter ASI) relating to the organized sector pharma units in Gujarat shows an increase in the capital output ratio by about three times between 1980-81 and 1994-95. The ratio of invested capital to labour increased during the same period nearly six times indicating a significant rise in capital intensity in this sector. But a large number of units are outside the purview of ASI. According to the data provided by the FDCA, the capital investment in the state's pharma sector, in real terms, went up dramatically over the 1980s and 1990s.
Production, Trade and Market: There was a commensurate rise in pharma production too. During the period between 1979-80 and 1997-98, the share of the state's production in that of all India has increased from around 26 per cent to close to 46 per cent.
Despite fluctuations, there has been a secular increase in the state's exports. It may be observed that exports as a proportion of turnover was much higher in the nineties as compared to that in the previous decade. The state's share in all India exports was 16 per cent in 1997-98. This clearly substantiates the relative dominance of Gujarat in the Indian market. It commanded around 50 per cent of the total domestic market in 1997-98.
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