Punjab has a pharmaceutical manufacturing cluster around Mohali and Derabassi, adjacent to the much larger cluster at Baddi just over the Himachal border.
Baddi grew because of a central excise exemption for hill states announced in 2003, which pulled manufacturing investment out of Punjab and into Himachal along a boundary that is otherwise invisible.
That is a clear case of Punjab losing industry to a tax boundary rather than to any economic fundamental, and it is cited in every discussion of the state's industrial position.
The information technology sector at Mohali is modest by Indian standards and is the state's main attempt at a service economy.
Punjab's industrial policy problem is straightforward: high power costs from cross-subsidy, no port, a hostile border, and neighbouring states offering better terms. None of these is new and none has been solved.
The exemption ran for about a decade and the units that moved to Baddi and Barotiwala are within ten kilometres of the Punjab border. The workforce commutes from Punjab and the tax is paid in Himachal.
Mohali's own cluster works in formulations and contract manufacturing rather than in bulk drugs, and it depends on active ingredients imported from outside India.
The pattern repeats. Punjab supplies the labour and the land next door takes the plant, and it has happened with pharmaceuticals, with light engineering and with food processing.