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Odisha envisages global pharma leadership through uncapped fiscal incentives & strategic workforce subsidies
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Peethaambaran Kunnathoor, Chennai
December 26 , 2025
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The recently launched Odisha Pharmaceutical & Medical Devices Policy 2025 envisages a dramatic reduction in the financial barriers to entry, positioning the state as India’s most cost-effective destination for healthcare manufacturing.
By shifting the focus from traditional caps to an open-ended support system, the state government is signalling a departure from conventional industrial subsidies.
At the heart of this fiscal revolution is a groundbreaking 30 per cent capital investment subsidy on plant and machinery. Crucially, the policy envisages this benefit as ‘uncapped’, a rare move in Indian industrial policy designed specifically to lure mega-projects. By removing the upper ceiling on financial aid, Odisha is making a direct play for multinational corporations and domestic giants planning multi-thousand-crore investments.
The policy further envisages a total overhaul of land acquisition costs to ensure rapid project commencement. Manufacturers can avail of a 50 per cent subsidy on land costs, provided they meet specific local employment criteria. This is bolstered by a 100 per cent exemption on stamp duty, effectively lowering the initial capital outlay and significantly improving the Internal Rate of Return (IRR) for new ventures.
Recognizing the labour-intensive nature of the sector, the state envisages a unique Employee-Linked Incentive (ELI) model. To qualify for land concessions, units must employ at least 200 Odisha-domiciled skilled workers. To support this, the government will provide direct monthly stipends for five years, Rs. 15,000 for female and Rs. 12,500 for male technical staff, alongside full reimbursement of ESI and EPF contributions.
Operational sustainability is another core pillar the policy envisages, targeting the high energy demands of pharma units. New facilities will benefit from a power subsidy of Rs. 2 per unit and a complete waiver of electricity duty during their initial years. These measures are expected to save large-scale manufacturers millions in annual overheads, making Odisha more competitive than neighbouring industrial hubs.
Moving up the value chain, the framework envisages Odisha as a centre for high-end science through a dedicated Innovation Fund. This fund is designed to de-risk the research process by providing financial assistance for patent registrations and clinical trials. It specifically envisages the development of ‘Orphan Drugs’, pushing the local industry to move beyond generic manufacturing into specialized, high-value medicine.
The policy also envisages a seamless transition for investors through plug-and-play utility support. By providing integrated infrastructure, such as centralized effluent treatment, the state aims to absorb the environmental compliance costs that typically burden individual manufacturers. This holistic approach ensures that companies can focus entirely on production and global exports.
Ultimately, the 2025 policy envisages a future where Odisha’s industrial footprint expands far beyond its current 37 units. By aggressively slashing both setup and running costs, the state government is not just offering incentives, it is envisaging a complete manufacturing revolution that seeks to dominate the Eastern Indian economic corridor.
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