Baddi in the Solon district of Himachal Pradesh is emerging as the pharmaceutical industry capital of India. More than half of India's pharmaceutical production, mainly formulations, would originate from Himachal Pradesh in few years as 200 odd medium and large-scale units are coming up in and around Baddi.

The fortunes of Baddi began to change with the visit of the then Prime Minister to Uttranchal and Himachal Pradesh during March 29 and 31, 2002, where he announced tax and central excise concessions to attract investments to special category states.

The major attractions for investors included 100 per cent outright excise duty exemption for a period of ten years from the date of commencement of commercial production (the past budget stipulated it to industries starting on or before 31st March 2007), 100 per cent income tax exemption for an initial period of five years and thereafter 30 per cent for companies for a further period of five years, capital investment subsidy of 15 per cent on plant and machinery subject to a ceiling of Rs 30 lakhs, applicable also to existing units.

The schemes are also available for existing units going in for expansions. The identified thrust sectors included non-polluting pharma and herbal products. Besides, the State Government also announced a slew of attractive investment schemes, including single window clearance for projects.

The major investors at Baddi include Alkem Laboratories Ltd with a Rs 60- crore investment plan for a new formulations plant, Indoco Remedies with a Rs 25-crore tablets, creams and medicated toothpaste facility, Bangalore-based Bal Pharma with a Rs 20-crore tablets and capsuling facility and Unichem Labs with two new plants at an investment of Rs 40 crore and Rs 32 crore. Unichem is already operating a betalactum plant in Baddi. The Delhi-based Promed is investing Rs 25 crore and the Hyderabad-based Pulse Pharma with another Rs 6 crore facility. Morepan Laboratories, which started two units at Rs 60 crore and Rs 50 crore (bulk drug) about two years ago, is further developing a Rs 20 crore biotech research project with US collaboration.