Pharmaceutical Industries

Location factors

  • A footloose industry and hence mainly located near the market.
  • Government policies play huge role, e.g.- Pharma industries in Baddi (Himachal)
  • Requires skilled labour, efficient transportation and research centers.

Footloose industry is a general term for an industry that can be placed and located in a wide variety of places without much effect from factors such as raw material. These are called footloose as these types of industries are prone to relocation. land, labour, and capital. These industries often have spatially fixed costs, which means that the costs of the products do not change despite where the product is assembled.

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  • High dependence on China for active pharmaceutical ingredients
  • Issues in patent regime on account of evergreening and compulsory licensing which discourage the foreign investors to invest in India.
  • Pirated version of medicines, black marketing and hoarding.
  • Inaccessibility to European market on account of lower standards.
  • Lack of R&D in sectors like biotechnology and nanotechnology.


  • Proximity to petrochemical hubs near Gujarat and Mumbai which provides raw materials. (Active Pharmaceutical Agents are mostly imported into India, which is the chief constituent of pharmaceutical industries).
  • Proximity to ports for easy exports of medicines and imports of active pharmaceutical ingredients.
  • Nearness to Africa which serves as a huge market for Indian pharma.
  • Higher availability of capital, entrepreneurship and availability of skilled labor.
  • Higher per capita income in western India, where local consumption of drugs is also higher. 
  • Presence of industrial inertia and higher ease of doing business in western states.
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