FIPB clears six investment proposals in pharma sector Foreign Investment Promotion Board clears proposals worth Rs. 855 crore
Ministries, including health, finance and commerce are deciding on conditions to be imposed on foreign direct investments in the pharmaceutical sector. Photo: Bloomberg
New Delhi: India’s Foreign Investment Promotion Board (FIPB) on Monday cleared six investment proposals in the pharmaceutical sector worth Rs. 855 crore.
Earlier this month, FIPB had cleared seven proposals related to the sector even as the industry department and local drug makers are demanding clarity on India’s foreign direct investment (FDI) policy.
The department of industrial policy and promotion (DIPP) had raised concerns over a spate of acquisitions of local pharma companies by multinationals since few investments were being made in creation of production facilities in India. The proposals approved at the meeting include that of Smith & Nephew Pte Ltd, Globion India Pvt. Ltd, Calyx Chemicals and Pharmaceuticals Ltd, Fresenius Kabi (Singapore) Pte Ltd, Lotus Surgical Specialities Pvt. Ltd and Celon Laboratories Ltd.
Ministries, including health, finance and commerce are deciding on conditions to be imposed on foreign direct investments in the pharmaceutical sector.
“There is ample evidence to suggest that acquisitions and mergers lead to changes in patterns of productions, even discontinuing certain drugs and vaccines needed in India,” said Sakthi Selvaraj, a development economist and a member of the All India Drug Action Network. “The bigger concern for our markets would be pricing of the drugs.”
India permits 100% foreign investment in the pharmaceutical sector through the automatic approval route for new projects but foreign investment in existing drug makers are allowed only after FIPB’s approval. The DIPP had earlier decided that any multinational firm buying a stake higher than 49% in an Indian pharma company will maintain the same level of investment in research activities and production of essential medicines for five years and is now seeking more riders to be included in the policy fearing adverse impact on the domestic industry.
