According to the Department of Industrial Policy and Promotion, foreign direct investment (FDI) in the drug and the pharma sector more than doubled to USD 1.26 billion in the April-December 2013-14 period from the same period a year ago.
In the April- December period of 2012-13, India's pharma sector attracted FDI inflow of USD 589 million.
Foreign drug companies have been on an acquisition spree in India as the Indian drug and pharma sector has seen several acquisitions by overseas firms in recent months, raising calls for tightening of rules for foreign investors in existing firms. However, a proposal by the Commerce and Industry Ministry to stem the surge in acquisition of Indian pharma firms by MNCs by tightening norms for foreign investors was rejected by the Union Cabinet.
Brownfield or existing pharma sector accounted for more than 96 per cent of the total FDI in the sector between April 2012 and April 2013.
As per the government policy, 100 per cent foreign direct investment in the pharma sector through the automatic approval route in new projects is allowed. However, overseas investment in existing Indian companies is allowed only after obtaining the approval of the Foreign Investment Promotion Board (FIPB).