Gujarat - A Re-emerging Pharma Destination

Gujarat has been the flag bearer of India’s pharmaceutical industry since the establishment of the country’s second oldest drug company, the Alembic Chemical Works Company Limited in Vadodara in 1907. Gujarat’s strategic location on the western coast, coupled with dynamic entrepreneurial talent and favourable policies from the State Government has led it to become one of the premiere industrial hubs for investors looking to invest in India.

Gujarat currently has 33 percent of the aggregate share of the pharmaceutical industry in India[1] and the State also accounts for at least 28 percent of the pharmaceutical exports from India[2]. Moreover, with the advent of the Goods and Service Tax (GST) coupled with the upcoming expiry of tax holidays granted by some northern states of India, the pharmaceutical industry is witnessing a jurisdictional shift, with some of the largest pharmaceutical companies looking to relocate or establish their manufacturing plants in Gujarat.
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Morning Mumbai mist, hot coffee and the 1986 song ‘The Final Countdown’ by Europe is playing in the background – life seems blissful! And it was mostly so for the Alternative Investment Funds (AIFs) industry. As we begin the run-up to Budget 2018, we look back at the milestones crossed in 2017 and the goalposts set for 2018 – and we focus on the key hits, misses and asks of the AIF industry.

2017: Key Highlights 

  • Investment by Banks in Category II AIFs: The Reserve Bank of India (RBI) amended the Reserve Bank of India (Financial Services provided by Banks) Directions, 2016 permitting banks to invest in Category II AIFs up to a maximum cap of 10% corpus of such AIF. With Category II AIFs constituting nearly 50% of the total number of AIFs registered with the Securities and Exchange Board of India (SEBI), this amendment sets the roadmap for channeling domestic savings into productive alternate assets and, at the same time, provides banks with the ability to earn a risk-adjusted return, thereby boosting the overall Return on Equity for its stakeholders.


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