This means that the status quo has been maintained for brownfield pharma projects. “Every proposal for foreign investment in existing Indian pharmaceutical companies will go to FIPB till the time the Competition Act is amended,” a source said.
The decision was taken at a meeting called by Prime Minister Manmohan Singh on Monday to formalise norms for pharma foreign direct investment (FDI) policy, according to sources. Finance Minister P Chidambaram, Commerce and Industry Minister Anand Sharma and Health Minister Ghulam Nabi Azad, among others, were present at the high-level meeting, they said.
On Monday’s meeting was called to decide on two important issues in the pharma FDI policy - the limit to which foreign companies will be allowed to acquire shares in a domestic company and the role of Competition Commission of India (CCI) in mergers and acquisitions.
While the finance ministry wants only those cases involving FDI beyond 49 per cent in units to be considered by FIPB, commerce ministry favours all foreign investments in pharma units to be approved by FIPB.
The issue was taken up by the government after the acquisition of big Indian companies — including Ranbaxy, Shanta Biotech and Piramal Health Care’s health unit - by foreign companies. The domestic industry is apprehensive that the entry of foreign players in the Indian market may impact the availability of generic medicines as the overseas companies would focus on costly patented medicines.
The contract has been put on hold and further payments have been stopped
Jaitley, however, cautioned things may go from bad to worse if the country gave a fractured mandate in the ensuing general elections