PM slated to formalise pharma FDI norms today

Ahead of the discussion in Parliament on foreign direct investment (FDI) in retail slated to begin on Tuesday, Prime Minister Manmohan Singh will formalise the pharmaceutical FDI policy guidelines at a meeting on Monday, sources said.

Officials in the know said the Prime Minister was expected to approve a framework, allowing continuous flow of foreign investment into the sector, with essential checks and balances.

The strategy would be to keep foreign companies interested in India without compromising on the availability and price of critical medicines, they added.

Two important issues to be decided in the pharma FDI policy are how much stake a foreign company will be allowed to take in an Indian firm and the role of the Competition Commission of India in the mergers and acquisitions (M&As) in the sector.

 

The government woke to the issues pertaining to M&As after acquisition of big Indian companies such as Ranbaxy, Shanta Biotech and Piramal Health Care’s health unit by foreign companies.

According to the finance ministry, only those cases involving FDI beyond 49 per cent in existing units need to be considered by the Foreign Investment Promotion Board (FIPB). On the other hand, the commerce ministry wants all foreign investments in existing pharma units to be approved by the FIPB.