Keeping aside concerns about non-availability of affordable drugs in view of MNCs takeovers, Government has decided to retain the policy of allowing 100 per cent foreign direct investment (FDI) in the existing pharma firms. However, Department of Industrial Policy and Promotion (DIPP) has underscored that as far as the contentious issue of non-compete clause is concerned, the Foreign Investment Promotion Board (FIPB) will decide upon the same on case-by-case basis.
Faced with a rush of multinationals acquiring Indian pharma firms, the DIPP had earlier proposed stringent norms to tighten the Foreign Direct Investment (FDI) policy for the sector. On the grounds of Indian pharma companies being severely impacted by availability and affordability of generic medicines in the country, DIPP had earlier proposed reduction in the FDI cap to 49 per cent from 100 per cent in rare or critical pharma verticals. However, Union Cabinet at its meeting ruled out that suggestion.
As per estimates, over 96 per cent of the total FDI in the sector between April 2012 and April 2013 has come into brown-field pharma. The government, recently in September, cleared a Rs 5,168 crore proposal of US-based pharma firm Mylan Inc's to acquire Indian generic drugs company Agila Specialties. As per the existing rules, India allows 100 per cent FDI in pharma sector through automatic approval route and 100% in brown-field projects through the FIPB approval route.
Faced with a rush of multinationals acquiring Indian pharma firms, the DIPP had earlier proposed stringent norms to tighten the Foreign Direct Investment (FDI) policy for the sector. On the grounds of Indian pharma companies being severely impacted by availability and affordability of generic medicines in the country, DIPP had earlier proposed reduction in the FDI cap to 49 per cent from 100 per cent in rare or critical pharma verticals. However, Union Cabinet at its meeting ruled out that suggestion.
As per estimates, over 96 per cent of the total FDI in the sector between April 2012 and April 2013 has come into brown-field pharma. The government, recently in September, cleared a Rs 5,168 crore proposal of US-based pharma firm Mylan Inc's to acquire Indian generic drugs company Agila Specialties. As per the existing rules, India allows 100 per cent FDI in pharma sector through automatic approval route and 100% in brown-field projects through the FIPB approval route.
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