This is also in response to a commerce ministry request seeking prime ministers intervention in the matter. Admitting that there is a deadlock between various arms of the government on the method of regulating FDI in pharma, the commerce ministry in a recent letter to the PMO had sought a meeting of all stakeholder ministries to resolve differences with the Prime Minister as the chair. FE had reported that the PMO had sent a clear message to the commerce ministry stating that any further deliberations on a suitable process to clear brownfield pharma deals must comply to what has already been decided upon. In essence, it meant that whether the CCI is the suitable body to vet pharma deals should not form part of future inter-ministerial deliberations on the issue.
During the exchange of letters, the commerce ministry had asserted its preference of the FIPB over the CCI for the role of the guardian of public health in the country. Both the health and commerce ministries are clear that the CCI cannot be expected to stop a deal strictly and solely on grounds of public health.
Second, those supporting the FIPB route also argue that the CCI is a regulatory body with an adjudicatory body - the Competition Appellate Tribunal - above it, and thus its decisions are prone to being contested in the tribunal and higher courts, which could translate into inordinate delays in clearance of a deal. This would deter investments in the long term.
Similar differences divided a previous inter-ministerial group headed by planning commission member Arun Maira in 2011. The PMO stepped in last year to rule that Mairas suggestion of vetting brownfield deals through the CCI should become the norm, and gave the competition body six months to brace up for its new role. Meanwhile, the FIPB was asked to function as the temporary gatekeeper in case of pharma deals.
Although it has been over seven months now, the FIPB continues to act as the filter for pharma deals as the CCIs new role wouldnt be possible without amending the Competition Act.