A meeting on foreign direct investment (FDI) in brownfield pharmaceutical projects held in the health ministry on Monday to gauge the public health implications, saw most participants agreeing that allowing 49 per cent FDI through the automatic route could jeopardise public health in the country by leaving it dependent on foreign manufacturers for life-saving drugs.
Stakeholders emphasised the importance of evolving transparent and non-arbitrary criteria for foreign companies to acquire stakes in domestic drug ventures.
India currently allows 100 per cent FDI in the pharma sector but proposals for investment in existing pharma companies require clearance from the Foreign Investment Promotion Board (FIPB).
A committee headed by economic affairs secretary Arvind Mayaram has proposed raising FDI cap through the automatic route to 49 per cent in all sectors including pharma. The Prime Minister is all set to discuss a new FDI policy with Cabinet colleagues on Tuesday.
The health ministry has already made its stand clear that it is not in favour of any foreign investment in existing drug companies that has not been cleared by FIPB. “We have already made our stand clear that whatever investment comes from outside to pharmaceutical companies even if it is 15 per cent or 20 per cent should be cleared by FIPB. We are not in favour of the automatic route,” said a senior health ministry official who was present in the meeting.