Logjam over FDI in Pharma continues

The logjam over the issue of foreign direct investment in the pharmaceutical sector is not likely to break any time soon.

The logjam over the issue of foreign direct investment (FDI) in the pharmaceutical sector is not likely to break any time soon.

While a committee headed by a Planning Commission member has favoured that all the mergers and acquisitions in the sector should be vetted by the Competition Commission of India,the nodal department for FDI policy has opposed it,favouring instead the current regime of the Foreign Investment Promotion Board (FIPB) approval.

The committee was formed with representatives from the ministry of health and family welfare,and the departments of industrial policy and promotion and science and technology,to recommend measures conducive for promotion of greenfield investments in the sector.

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The group,chaired by Arun Maira,has argued that the FIPB route for brownfield projects is not a feasible approach given the opaque nature of the functioning of the board. While,on the other hand,he says,the CCI is more sophisticated and transparent mode for clearing such M&As.

The department of industrial policy and promotion (DIPP),along with the health ministry,advocates the approval route in brownfield projects otherwise it will highly dent the access of generic drugs.

The department is of the view that CCI is a new body and its efficiency is questionable and there are limitations to it.

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