The government today approved eight proposals for foreign direct investment (FDI) in the pharmaceutical sector, involving investments to the tune of Rs1842.55 crore, as it cleared a total of 21 FDI proposals involving investments of a total Rs2,410 crore.
The eight proposals, worth Rs1,842.55 crore FDI in brownfield pharmaceuticals sector, were deferred at the earlier meetings of the Foreign Investment Promotion Board (FIPB) because of differences in views of the various administrative ministries.
These proposals have now been approved, subject, inter alia, to the conditions that the quantitative level of production of National List of Essential Medicines (NLEM) at the time of induction of foreign investment will be maintained at that level for the next 5 years.
The government said foreign companies including US-based Pfizer and Germany's B-Braun would have to continue producing cheap drugs and maintain spending in ongoing research and development projects run by their Indian partners for five years.
The level would be defined as the highest annual production level of NLEM drugs in quantitative terms, in any of the three years preceding the induction of foreign investment, an official release said today.
Also, the investee firms should provide the administrative ministry appropriate information on the expenses incurred on research and development annually, maintain the annual induction of foreign investment in value terms over the next 5 years post induction of FDI.
The investing company would be required to provide appropriate and complete information pertaining to the transfer of technology, if any, along with induction of foreign investment into the investing company to the administrative ministries concerned and the FIPB secretariat, the release added.
Global drug makers, which have already a significant presence in the pharma market, is trying to expand their market even as new entrants are trying to enter through tie-ups, acquisitions or through 100 per cent subsidiaries.