Sources in industry ministry said the proposal was discussed but no decision was taken. The Pfizer proposal has snowballed into a major controversy following stiff opposition by minority shareholders of its existing company Pfizer India which have found total support from industry associations Confederation of Indian Industry and Federation of Indian Chambers of Commerce and Industry.

This is, perhaps, the only proposal which has come back to FIPB after having been cleared once. FIPB had approved the proposal on August 23 and recommended it for the industry minister's approval.

The FIPB decision will set the government policy for foreign companies which have listed subsidiaries in the country and also intend to set up a wholly-owned subsidiary.

Pfizer is the biggest shareholder in Pfizer India with the remainingshareholding being divided among financial institutions and the public.

The minority stakeholders which had formed an association called the Pfizer India Minority Shareholder Association had contended that their shareholders' value will get eroded following the US pharma major setting up its wholly-owned subsidiary.

Both CII and FICCI had argued that if an MNC is allowed to set up anotherwholly-owned subsidiary, the interest of the minority shareholders in the existing subsidiary gets undermined as it is feared that the foreign company may introduce new products or technology or even make investments in the wholly-owned subsidiary at the cost of the existing subsidiary.

The government had defended its stand on the issue by claiming that the Pfizer case is different as there is no Indian joint venture partner. Government regulations make it mandatory for foreign companies to acquire a no-objection certificate (NOC) from their existing domestic partners if they want to set up another subsidiary formanufacture of the same products.

The stakeholders and FIs had said that their consent should also have been taken just like FIPB insists on a no objection certificate from Indian partners.