The small hilly state, geographically located in the north-western part of the country, is surrounded by four states, namely, Uttar Pradesh, Punjab, Haryana and Jammu & Kashmir with Tibet on the other side. Himachal Pradesh is among the most advanced socio-economic states and has shown promising growth over the years. Over the last decade the strong agro-based economy has shifted towards services, particularly tourism.
The state is sparsely populated with less than half of Delhi's population and about 40 times its area. Endowed with natural attractions, tourism is one of the key contributors to the state's income. Some of the tourist attractions include tribal areas, mountaineering, winter sports like skiing, besides a large number of pilgrim centres. It is a hub for domestic and foreign tourists.
The state is largely an agro-based economy with about 71 per cent of its population dependent on farming, horticulture and livestock for their livelihood. The main crops are wheat, corn (maize), barley, rice and potatoes. It is one of the leading fruit and vegetable producing states in the country. The State Government has steadily been focusing on improvement of industrial infrastructure.
A slew of industrial parks and estates including export-oriented parks for agro-processing units have been set up, thus, strengthening the agriculture sector in the state. Several fruit and food processing units and other allied industries like warehousing and packaging have come up in various parts of the state. The state's agro-processing units have highest per capita output and value addition in the country.
Himachal Pradesh has one of the highest levels of telecom penetration in the country. The state has a well-developed banking sector with a high density of bank branches. It has the highest hydel power generation potential in the country and has fostered private sector participation in the sector.
The Government of Himachal Pradesh has formulated its policies with an objective to improve the industrial sector in the state. It has initiated many welfare programmes to improve the economic well being of its people. The state provides special package of incentives to the investors and ranks highest on the incentives index. The state enjoys a healthy investment climate with the presence of several domestic and multinational corporations.
Himachal Pradesh has also emerged as a hub for the pharmaceutical industry in India. The state has more that 300 pharmaceutical firms, including leading pharmaceutical companies such as Dr Reddy's Laboratories, Cipla and Ranbaxy, and many top names in the industry. Till the quarter ending March 2007 the state has attracted a massive investment of USD 12 billion, which is comparatively 23.7% higher than the previous year.