Approach to the answer 

Understanding and structuring the answer: 

The question gives a fact (location of pharmaceutical industry) and asks to provide reasons to justify this. 

Introduction: 

Type 1: Write the nature of pharmaceutical industry. or 

Type 2: Give the importance of pharmaceutical industry especially in the backdrop of COVID-19. 

Draw a map after the introduction showing the location of the pharmaceutical industry. 

Body: 

Heading 1: Factors Responsible for regional concentration of pharmaceutical industry. 

Conclusion: Provide new trends in the location of pharmaceutical industries. 

Answer: Pharmaceutical is a footloose industry as it does not depend upon specific local raw materials which are either weight-losing or weight gaining. However, despite being a footloose industry, pharmaceutical industry is heavily concentrated in Maharashtra and Gujarat. 

Factors Responsible for regional concentration of pharmaceutical industry 

• Proximity to ports: Easier imports of active pharmaceutical ingredients and export of finished pharma products to markets like Africa.  

• For example – ports like Kandla, Mumbai, Bhavnagar etc. 

• Availability of Capital: Western States have relatively good banking systems. Access to long-term credit is essential to undertake new R&D activities.  

• For example – Mumbai is considered the financial capital of India. 

• Labour: Pharmaceutical industry requires a skilled workforce. Western States attract talent from across the country. For example, Maharashtra has many pharma training institutes like Bombay College of Pharmacy and Government College of Pharmacy 
• Infrastructure: Western states provide good infrastructure such as roads, rail, airports and ports. Moreover, there are many Special Economic Zones on the western coast.  

• For example – GIFT city in IFSC, Gujarat. 

• Policies: State governments have provided tax exemptions and faster clearances.  

• For example – Mumbai gives tax incentives to pharmaceutical industry. The state government offers a stamp duty exemption of up to 50% on the purchase of land for setting up a pharmaceutical manufacturing unit. 

• Petrochemical hub: Pharmaceutical industry requires petrochemicals as one of the inputs in making drugs.  

• For example – India's biggest petrochemical plant is in Bharuch, Gujarat. 

However, the pharmaceutical industry in India has seen some diversification by shifting in some hilly states due to favourable climate and in Hyderabad due to favourable state policies. The Government of India has also introduced the Production Linked Incentive for nationwide growth of the pharma industry.