View on FDI in key sectors(Pharma)

FDI & FEMA : Reinforcing Indian Economy

Part - 8

Pharma

Cabinet Committee on Economic affairs (CCEA) allowed 100% FDI in both Greenfield (new) and Brownfield (existing) segments.

FDI in the Pharma sector grew 115% to $1.25 billion during April-Nov of the current financial year over the same period last year. FDI in drugs and Pharmaceuticals was $581 million during April – Nov 2012 as per the latest data available with Department of Industrial Policy Promotion (DIPP).

Pharma

The Commerce & Industry ministry debates on lowering the FDI cap to 49% in the Brownfield segment, keeping in mind the affordability of medicines and takeovers of domestic drug making companies by multinational giants.

FDI in retail is highly debatable but the same in the pharma sector will only trigger the economy to newer heights and also ensure a remarkable growth in Technology and medical advancements.

Pharma

Contrary to this, there is concern over the price rise of generic drugs. Following the number of takeovers of Indian pharma companies by the MNCs, even the Health ministry is showing concern over the price issue of generic drugs.

There are apprehensions expressed by some of the drug making lobbyists from the domestic industry about the arrival of MNCs to monopolize the Indian Pharma sector, particularly after the six famous acquisitions. Only time would tell how much of the apprehensions were correct or otherwise.

Pharma

Driven by the government’s recent reform measures, India’s net foreign direct investment inflows recorded over 50% growth during the April-July quarter of the current fiscal.

Net FDI inflows rose to USD 8.2 billion during the period April-July 2013 from USD 5.4 billion during the corresponding period of the previous year.

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