A Lethargic Government, Can Manmohan Singh Fix It?
By siliconindia   |   Thursday, 16 February 2012, 00:52 IST   |    3 Comments
Printer Print Email Email
3) Differences within the government over a proposal to put a cap on FDI in the pharmaceutical sector:
pharmaceutical sector
By 2015, the Indian pharmaceutical industry is expected to become a $20 billion industry from which has a present turnover of $12 billion. The health ministry of India has asked for a complete ban of takeovers of Indian drug companies by MNCs capping the foreign investments in the pharma sector. According to them the mergers and acquisitions between the Indian drug companies and MNCs has led to the increase in price of generic drugs. Among other ministries, there are differences over proposed filters on the FDI in this industry. At present, there is 100 percent overseas investment in the pharma sector which takes place through automatic route without any intervention from the Foreign Investment Promotion Board. The PMO office which is led by Arun Maira for this issue has suggested that putting a cap would heard the sentiments of foreign investors and would retrograde the country's image as an investment destination. The planning commission has also the backing of the finance industry which agrees that imposing caps at this stage can scare off foreign investors and prevent investments in the sector.