FDI in drugs and pharmaceuticals was $589 million in the April-December period of 2012-13, according to the latest data of the Department of Industrial Policy and Promotion.
Faced with the rush of multinationals to acquire Indian pharma firms, the commerce and industry ministry had proposed tightening of norms for foreign investors in the existing firms, but the Cabinet rejected the proposal.
The department had proposed the norms to arrest the spurt in pharma MNCs taking over domestic firms that make "rare and critical" medicines.
As per estimates, over 96% of the total FDI in the sector between April 2012 and April 2013 has come into brownfield, or existing, pharma.
The government had cleared a Rs 5,168 crore proposal of US-based pharma firm Mylan Inc's to acquire Indian generic drugs company Agila Specialties.