Commerce and Industry, Anand Sharma has written to Prime Minister, Manmohan Singh and the Finance Minister, P. Chidambaram to convene a high level meeting to review the present foreign direct investment (FDI) policy for brownfield investments in the pharmaceutical sector which has widespread ramifications for the health sector in the country.

Mr. Sharma, in a note to the Prime Minister and a letter to Mr. Chidambaram, has stated that the present policy has failed to bring the required benefits and needs immediate review at the highest level as it can have an adverse impact on the health related matters for the country. ``FDII in the pharma sector has neither proved to be an additionality in terms of creation of production facilities nor has it strengthened the R&D in the country. All these facts make a compelling case for revisiting the FDI policy on brownfield pharma. I, therefore, urge the Prime Minister to convene a high level meeting along with the Finance Minister, Health and Family Welfare Minister, Fertilizer and Chemicals Minister to deliberate upon the matter and take a call on the FDI issue,’’ he has stated.

In the recent past, the Commerce Ministry has expressed concern that majority of FDI in the pharma sector was coming only in existing units brownfield units. ``In case the present FDI policy continues, then our domestic capability will gradually wither away. In that case, India would be compelled to be dependent for life-saving medicines either on domestic facilities of MNCs or on imports,’’ Mr. Sharma’s note to Dr. Singh states.

It goes on the state that production of many critical drugs and medicines has been lost and India is already import dependent for intermediates and vital drugs like penicillin, which is a matter of serious concern. According to official data, between April 2012 and April 2013, as much as $989 million FDI was received in brownfield investment, and a mere $87.3 million in the greenfield investments. ``Most of the FDI in pharma during this period has been brownfield, thereby merely a substitution of domestic capital by foreign capital rather than an additionality,’’ he added.

The Department of Industrial Policy and Promotion (DIPP) had earlier this month raised concerns over spate of acquisitions of domestic pharma firms by multinationals. Currently, 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.