Bulk drugs park at MIHAN in Nagpur yet to start operations due to poor investor response

Shardul Nautiyal, MumbaiMonday, November 2, 2020, 08:00 Hrs  [IST]

Even after allocation of land to several companies, the bulk drugs park at Multi-modal International Passenger and Cargo Hub Airport (MIHAN), Nagpur is yet to start operations because of poor investor response. The Maharashtra Airport Development Company (MADC) had allocated land to 12 pharma companies and medical institutions in MIHAN, Nagpur for developing bulk drugs and medical devices.

Meanwhile, Maharashtra government has given in principle approval for a bulk drugs park in Raigad and medical equipment park in Aurangabad for indigenous manufacturing of bulk drugs.

This comes at a time when the Department of Pharmaceuticals (DoP) is also taking ahead development of bulk drugs parks in states which guarantee maximum benefits to potential investors like good R&D facilities among others, according to an official associated with the development.

DoP in July this year had asked the states to send their proposal for incentive schemes and the top three will be selected by the Centre for setting up the bulk drug park. Maharashtra government has proposed to the DoP to set up the bulk drug park at Raigad district of Maharashtra and earmarked 5,000 acre in 17 villages in Roha and Murud tehsils for the project. The estimated cost of the bulk drug park and medical equipment manufacturing park is Rs. 2,442 crore and Rs. 424 crore, respectively.

As per the guidelines notified, 70% funding for setting up bulk drugs park will be borne by the Centre and 30% by the state.

DoP had proposed in July 2020 three bulk drug parks to be set up in the country to reduce the dependence of Indian drug manufacturing companies on China.

In a bid to promote indigenous manufacturing of drugs and medical equipment, the Central government in July had announced guidelines and schemes for the development of bulk drug and medical device parks.

Maharashtra Food and Drug Administration (FDA) which had been assigned to facilitate manufacturers with modalities related to the bulk drugs park had stated that the ecosystem in MIHAN has motivated more new companies to set up bulk drug and medical device parks based on the letters of intent from the concerned manufacturers.

Last year, Maharashtra FDA and pharmaceutical companies at Nashik, Pune, Aurangabad and Thane held several meetings to explore investment opportunities in MIHAN.

MIHAN management team had also given a presentation on the modalities of setting up a bulk drugs park, implementation of guidelines, approvals and clearances required for the companies for setting up the units.

MADC is the nodal agency of the Government of Maharashtra for developing MIHAN and a multi-product SEZ adjoining the airport. MADC is also the Special Planning Authority (SPA) for MIHAN notified area under the provision of Monopolistic and Restrictive Trade Practices (MRTP) Act, 1969.

MIHAN SEZ is spread over an area of around 1,382 hectares and boasts of infrastructure like 6, 4 and 3 lane roads, telecom system using optic fiber cable, water supply which is both potable and for other uses, storm water drainage and sewage among other amenities. A power plant of 246 megawatt (MW) is also ready to supply power to units in MIHAN.

Companies will have the benefits of duty free import or domestic procurement of goods for development, operation and maintenance of SEZ units, 100% income tax exemption on export income for SEZ units for the first 5 years, 50% for the next 5 years thereafter and 50% of the ploughed back export profit for the next 5 years, external commercial borrowing (ECB) by SEZ units up to US$ 500 million in a year without any maturity restriction through recognised banking channels.

Incentives also include single window clearance, exemption from central sales tax, exemption from service tax, single window clearance for central and state level approvals, exemption from state sales tax and other levies as extended by the state government with 100% FDI allowed and GST exemption.