1 February , 2022 Fdiindia
Pharma Sector Witnesses “Sudden Spurt” in FDI
According to the Economic Survey, The Indian pharmaceutical sector saw a sharp rise in foreign direct investments (FDI) in 2020-21, mainly due to industry demands for therapeutics and vaccines due to COVID-19.
FDI inflows grew at the rate of 53 percent to Rs. 4,413 crore for April-September 2021, as per the Survey tabled in the Parliament by Finance Minister Nirmala Sitharaman.
The Survey mentioned that domestic manufacturers have made good quality medicines available in the market, enabling healthy competition and making India the ‘Pharmacy of the World’, but the country is still dependent on the import of bulk drugs for medicine formulation.
“The extraordinary growth of foreign investments in the pharma sector is mainly on account of investments to meet COVID-19 related demands for therapeutics and vaccines,” said the Survey.
The Survey stated that the Indian pharmaceutical industry is the third-largest global producer in terms of volume. The total pharma imports and exports for 2020-21 stood at $24.4 billion and $7 billion, respectively.
“India is the largest supplier of generic medicines with a 20 percent share in the global supply,” the Survey mentioned.
“Price competitiveness and good quality have enabled Indian medicine producers to be dominant players in the world market, thereby making the country the ‘Pharmacy of the World’”, it further added.
Mentioning the country’s dependence on drug imports, it said, “Although a prominent player in formulations, the country is significantly dependent on the import of bulk drugs that are used in the formulation of the medicine. In certain cases, import dependence varies between 80-100 percent.”
A high-level committee reviewed the drug import situation and has initiated measures to incentivize bulk production along with the government taking steps to fulfill the pharmaceutical and medical industry’s requirement.
The set of initiatives includes a Rs. 6,940 crore production-linked incentive scheme for bulk drugs, Rs. 15,000 PLI scheme for pharmaceuticals, and a scheme for the promotion of bulk drug parks that includes creating world-class infrastructure facilities.
Additionally, Rs. 3,420 crore has been allotted under the PLI scheme for medical devices by the government.