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Govt to finalise FDI policy in pharma before FIPB meet
New Delhi, June 30, 2013, PTI: 21:10 IST
The government is likely to finalise FDI policy with regard to existing drug companies ahead of the FIPB meeting on July 5, which is scheduled to take up as many as 10 foreign investment proposals.
The Department of Industrial Policy and Promotion (DIPP) has raised concerns over spate of acquisitions of domestic pharma firms by multinationals. The DIPP has sought the intervention of the Prime Minister’s Office on this matter.
Government sources said that on an average about 25 per cent of the FIPB agenda is related with pharma sector.
The continuing acquisitions of Indian pharma firms by foreign companies would pose serious problems in availability of life-saving drugs to consumers in near future, they added. Earlier, the Department had asked the Foreign Investment Promotion Board (FIPB) not to take decision on any related proposal.
FDI policy in the sector has already been discussed at the PM level in December last year. Accordingly, all foreign investments in existing domestic pharma firms was allowed only after clearance by the FIPB.
With no let up in multinationals seeking nod to acquire stake in Indian pharma firms despite government putting norms to check it, the DIPP has raised concerns stating the FDI policy in the sector needs a relook again at the PMO level.
Currently, India permits 100 per cent FDI in pharma sector through automatic approval route in the new projects but the foreign investment in the existing pharma companies were allowed only through FIPB’s approval.
In 2008, Japanese firm Daiichi Sankyo had bought out the country’s largest drug maker Ranbaxy for $4.6 billion. US-based Abbot Laboratories had acquired Piramal Health Care’s domestic business for $3.7 billion.