The Prime Minister’s Office (PMO) will take a final decision on foreign direct investment (FDI) norms in the pharmaceutical sector, a Finance Ministry official said here on Tuesday.
“We have reached a final consensus on approvals to the FDI proposals in the pharmaceutical sector. The recommendations will now go to PMO for approval,” the official said after the meeting of the inter-ministerial group.
The PMO had recently sought a status report on the FDI policy in the pharmaceutical sector saying it was worried over the continued delay in giving shape to a new document.
The group, headed by Mr Shaktikanta Das, Additional Secretary in Department of Economic Affairs, includes representatives of Department of Industrial Policy and Promotion (DIPP), Health, External Affairs, and Overseas Indian Affairs Ministries.
The meeting was attended by officials from these departments and considered various views on imposition of specific conditions on foreign investors, the official said.
The issue of relaxing FDI norms in the pharmaceutical sector has been pending for long because of differences between the Finance Ministry and DIPP.
The Finance Ministry favours capping FDI in the pharmaceutical sector at 49 per cent in existing units, whereas the DIPP has been supporting 100 per cent FDI through the Foreign Investment Promotion Board (FIPB) route.
In November, the Government had revised the policy that had decided to ensure that the sector is not controlled by foreign companies thereby denying availability of cheaper drugs in the domestic market.
It changed the 10-year old policy of automatic clearance, to address the Health Ministry’s concerns, after a series of acquisitions.
Some major acquisitions included Japan’s Daiichi Sankyo buying Ranbaxy Laboratories, Sanofi Aventis (France) buying Shanta Biotech and Abbott Laboratories of the US buying Piramal Health Care’s health unit.