Even as the Department of Industrial Policy and Promotion (DIPP), the nodal body for FDI policy, has circulated a draft Cabinet note that seeks to bring down FDI limit in brownfield pharma and calls for putting foreign investment in drug facilities defined as "critical" on the approval route, industry experts advocate the need to clear ambiguities in the current FDI policy to give the much required boost to the Indian pharma industry.

Experts argue that there is a need for a sustainable policy as dilly dallying in terms of Greenfield and Brownfield projects makes the investment climate unpredictable.

Advocating the need for a concrete mechanism to do away with government's intervention citing recent case of US-based Mylan Inc's acquisition of oncology drugs manufacturer Agilia Specialities, Dr Ajit Dangi, CEO, Danssen Consulting, said, "India is poised to become the largest vaccine producer of the world in the coming four years. Exceptions should be considered in terms of immunisation security issue or in areas considered critical. Competition Commission of India (CCI) can take care of the monopolistic practices arising out of mergers or acquisitions and Foreign Investment Promotion Board (FIPB) can also play a definitive role in giving clearances to the right candidate."

He concluded that considering the scenario about high fiscal and current account deficit, there is a need for FDI in the pharma industry. Indian corporate giants like TATA, Birla and Mittal are investing abroad but still there are graver issues of policy paralysis haunting India as the decisions are not taken promptly because of red tapism and scams.

Echoing similar views, ACG Worldwide chairman Ajit Singh said, "There should be free exchange in the market place. If an Indian pharma company is worried about a critical capacity going in the hands of an overseas firm, a condition should be mandated that the Indian company can use part of the production capacity to reproduce what has been sold out."

There are apprehensions that the MNCs taking control of Indian firms could lead to reduction in supply of vaccines, injectables, particularly for cancer and active pharmaceutical ingredients.

Meanwhile, it is learnt that Prime Minister Dr Manmohan Singh has asked DIPP to start consultation for making changes in the FDI policy to protect generic industry in the wake of increasing acquisitions of homegrown companies by foreign players.

The draft note is also aimed at preventing MNCs from changing product mix from generics to branded generics or patented ones after acquiring Indian companies, which could adversely impact the prices of generic drugs.