Paving the way for clearance of held-up pharma proposals, Finance Minister P Chidambaram has said that the government will soon finalise the foreign direct investment (FDI) policy on brownfield pharmaceutical projects. Chidambaram said that the discussion between the Ministry of Commerce, Prime Minister and others regarding the FDI in brownfield pharmaceuticals is likely to take place soon and once the policy is approved, the pharmaceuticals proposals stalled by the Foreign Investment Promotion Board (FIPB) would move forward.
However, the government has expressed concern over the continuing acquisitions of Indian pharma firms by foreign companies, which would pose serious problems in availability of life-saving drugs to consumers in near future. Production of many critical drugs and medicines has been declining in India and the country is already import-dependent for intermediates and vital drugs like penicillin. Following fears that Indians will be denied cheap medicines if multinational continue to buy big companies, the government had made a distinction between greenfield and brownfield projects last year.
At present, India permits 100 per cent FDI in pharmaceutical sector through automatic approval route in the new projects but the foreign investment in the existing pharmaceutical companies are allowed only through FIPB's approval. As per the RBI data, during April 2012 and April 2013, $989 million FDI was received in brownfield investment, and a mere $87.3 million in greenfield projects. Presently, there are too many pharma proposals pending with the FIPB as several global pharma companies are looking to buy stake in existing Indian firms. Meanwhile, the Department of Industrial Policy and Promotion (DIPP) is in the process of finalising its FDI policy on brownfield pharma projects involving transfer of control.
MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.
To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.
MoneyWorks4Me ensures this through: