DIPP flags may hold up FDI in pharma

The DIPP had once again raised concerns on foreign direct investment FDI in pharma at the last meeting of the Board. It was suggested that new proposals in the sector should be taken up only after these are clarified, said a senior government official. Although the date for the boards next meeting has not been finalised,it is expected to be held in early June,the official said.

The FIPB had last met on May 10 and took up four proposals for investments in the pharmaceuticals sector,including two related to Mylan Laboratories an American company; one of Terumo,a Japanese pharma major and another of Medreich,an India-headquartered multinational.

The DIPP,which is the nodal agency for finalising policy on foreign investments,is now expected to restart discussions with the health ministry and the department of pharmaceuticals.

But the DIPPs fresh concerns come after the issue was discussed at length last year and was even taken up by Prime Minister Manmohan Singh and an inter-ministerial group was set up to address all concerns.

While 100 per cent foreign direct investment is permitted in the sector was allowed through the automatic route,the DIPP had last year sought to differentiate between investments in greenfield and brownfield projects on concerns over availability of essential medicines.

Subsequently,FDI proposals in the sector were not being taken up and it was only from August that the FIPB started approving these cases.

It was later decided that all FDI proposals in the sector would be taken up by the board,which is chaired by the secretary,department of economic affairs.