The Health Ministry may have to reconsider its stand that all foreign direct investment (FDI) in existing pharmaceutical companies should continue to be routed through the Foreign Investment Promotion Board (FIPB). Both the Prime Ministers Office and the Planning Commission are inclined towards opening up FDI across sectors.
The Health Ministry has been opposed to the idea of including pharmaceutical companies in the automatic FDI list since its inception. In fact,the Parliamentary standing committee in a report tabled in the recently-concluded Monsoon Session called for a blanket ban on FDI in brownfield pharma companies.
But the Department of Industrial Policy and Promotion has now circulated a draft cabinet note,which seeks to set up a 49% FDI cap in brownfield pharma projects. Only when the units in question manufacture a critical vaccine would FIPB clearance be required,says the proposed policy.
This is as per the recommendation of a committee headed by Economic Affairs Secretary Arvind Mayaram,which proposed increasing the FDI cap through the automatic route to 49% in all sectors,including pharma. India currently allows 100% FDI in the pharma sector with conditions,and the investment has to be routed through the FIPB. The proposed policy would take the process almost entirely out of the remit of the Health Ministry.
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