Even as a decision is awaited on the final Foreign Direct Investment (FDI) policy in the pharma sector, the Foreign Investment Promotion Board (FIPB) has cleared seven out of the ten FDI proposals came before it.
The FIPB, at its meeting on Friday, deferred three proposals for FDI while clearing the seven, according to official sources. The cases were kept in suspension till the review process on the policy is finalized. The FIPB, headed by Department of Economic Affairs Secretary Arvind Mayaram, discussed 30 Foreign Direct Investment (FDI) proposals, including 10 from pharma sector.
The proposals which were discussed in the meeting on Friday included that of Singapore's GlaxoSmithKline, USA's Mylan Inc., Mauritius-based Castleton Investment, Mumbai- based Ferring Therapeutics and Hyderabad-based Verdant Life Sciences.
There were indications that all the proposals would be deferred till a final policy is announced after the ongoing review by the DIPP. 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 are allowed only after FIPB's approval.
The Department of Industrial Policy and Promotion (DIPP) had earlier raised concerns over spate of acquisitions of domestic pharma firms by multinationals. The Department had also asked the Finance Ministry to defer the proposals. FDI policy in the sector has already been discussed at the Prime Minister's level in December last year. Accordingly, all foreign investments in existing domestic pharma firms were allowed only after clearance by the FIPB.
Since April 2000, FDI of US$ 10.3 billion has come into the pharmaceutical sector, nearly five per cent of the total foreign inflows the country has received. On an average about 25 per cent of the FIPB agenda is related with pharma sector.