New Delhi: With several of the FDI projects in the pharmaceutical industry pending, the Finance Ministry has convened a meeting with the industry on June 7 to work out a mechanism for fast clearances of the proposals.
Though 100 percent Foreign Direct Investment (FDI) is permitted in the pharmaceutical sector, the proposals need approval of the Foreign Investment Promotion Board (FIPB) under the Finance Ministry.
Several of the proposals are facing delays and there is also a confusion whether these projects should be cleared by the FIPB or the Competition Commission of India (CCI).
Following a spate of takeovers of the homegrown pharmaceutical companies in the last 18-24 months, a concern was expressed in a section of the government and the civil society about desirability of the multinational companies increasing their hold on the Indian pharma market.
There has also been a concern that with big players dominating the market, essential drugs could become unaffordable for majority of the people.
It was in this backdrop it was decided last year to keep the FIPB filter on the pharmaceutical FDI proposals and not allow them through automatic route.
"We will meet the pharma industry on June 7 to sort out issues delaying clearances to FDI proposals. We will give them a check-list of the essential information FIPB needs," a Finance Ministry official said.
In the past couple of years, there has been a host of takeovers by foreign drug makers. This include Daiichi Sankyo's acquisition of India's largest drug company Ranbaxy Laboratories, Abbott Laboratories' purchase of Piramal Healthcare's domestic formulations business and Sanofi Aventis' buyout of Shanta Biotech.
First Published: Monday, June 04, 2012, 21:14