Govt retains 100% FDI in existing pharma units

Tags: FDI, Pharma, Economy
Government today decided to retain the policy of allowing 100 per cent foreign investment in the existing pharma firms, brushing aside concerns about non- availability of affordable drugs in view of MNCs takeovers.

The Department of Industrial Policy and Promotion (DIPP) said however that as far as the contentious issue of non- compete clause is concerned, the Foreign Investment Promotion Board (FIPB) will take a view on it on case-by-case basis.

"The government has reviewed the position in this regard and decided that the existing policy would continue with the condition that 'non-compete' clause would not be allowed except in special circumstances with the approval of the FIPB," the DIPP said in a Press Note.

Faced with a rush of multinationals (MNCs) acquiring Indian pharma firms, the DIPP had earlier proposed stringent norms to tighten the Foreign Direct Investment (FDI) policy for the sector.

It had said the continuous acquisition of Indian pharma companies will severely impact availability and affordability of generic medicines in the country, and asked for a reduction in the FDI cap to 49 per cent from 100 per cent in rare or critical pharma verticals.

However, the Union Cabinet at its meeting dismissed the DIPP concerns.

In September, the government cleared the Rs 5,168-crore deal of the US-based Mylan Inc for acquiring Bangalore-based pharma firm Agila Specialties, a subsidiary of Strides Arcolab.

In 2008, Japanese firm Daiichi Sankyo had bought out the country's largest drug maker Ranbaxy for USD 4.6 billion. US-based Abbot Laboratories had acquired Piramal Health Care's domestic business for USD 3.7 billion.

DIPP had said that over 96 per cent of the total FDI in the sector between April 2012 and April 2013 has come into the brownfield pharma, or existing projects and companies.

India permits 100 per cent FDI in pharma through automatic approval route in the greenfield, or new projects.


  • All the debates are glossing over the key question if children are eating healthy food

    For some time now, we have been strapped in noodle debates. First Maggie noodles and now our own swadeshi noodles that Baba Ramdev is making.


Stay informed on our latest news!


Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs


Amita Sharma

Smart cities for the smart citizens

The 21st century has been spoken of as the urban ...

Zehra Naqvi

Baby and you

Every person who’s had a chance to be a parent ...

Bubbles Sabharwal

Women of the world, unite for a change

Last week I attended the Women in the World forum ...


William D. Green

Chairman & CEO, Accenture