11 May , 2020 Fdiindia
Govt Plans to Focus on Faster Pharma Approvals for FDI in India
The central government has started charting out ways to attract more foreign direct investment in the country, including setting up a fast-track mechanism to clear applications of companies especially in the pharmaceutical sector that are looking to set up base inIndia with the US pushing its companies to relocate from China.
The Department for Promotion of Industry and Internal Trade (DPIIT) is planning to set up a database of all foreign direct investment (FDI) applications, queries from investors and the problems they have faced, in order to generate confidence in global investors that India’s response is quick.
ET reported an official with knowledge on the matter saying, “We are examining the entire FDI model, especially ways to boost investment in the pharmaceuticals sector and how can it be treated separately. We are studying different global models of pharmaceutical FDI.”
Currently, India permits 100 per cent FDI in greenfield, or new, pharma projects under the automatic route of approval. For brownfield pharma, or investments in existing companies, up to 74 per cent FDI is allowed under the automatic route and approval is required for investment beyond that. Also, foreign investments from both automatic and government routs of approval is subject to compliance of conditions such as maintaining the production level of the drugs on the National List of Essential Medicines, consumables and their supply to the domestic market at the time of induction of FDI, and on R&D expenses.
Last week, during a meeting with commerce and industry minister Piyush Goyal, law firms suggested that the government should consider allowing 100 per cent FDI in brownfield pharma.
The United Nations Conference on Trade and Development expects global FDI to shrink 30- 40 per cent in FY21 due to the coronavirus pandemic.
The deadly coronavirus, which emerged in the Chinese city of Wuhan last December has pushed the global economy into a standstill as countries order complete or partial lockdowns.