The government, on Tuesday, announced its approval to 21 foreign direct investment (FDI) proposals, envisaging a total forex inflow worth about Rs.2,410 crore. Of these, eight proposals entailing a total investment of Rs.1,842.55 crore pertain to FDI in the brownfield pharmaceuticals sector, decisions on which were deferred during the earlier meetings of the Foreign Investment Promotion Board (FIPB).
According to an official statement here, based on the recommendations of the FIPB, the eight pharma sector FDI proposals have now been cleared but the approvals, however, are subject to three specific conditions.
First, it has been specified that the quantitative level of NLEM (National List of Essential Medicines) drugs production annually at the time of induction of foreign investment will be maintained at that level for the next five years.
The level will be defined as the highest annual production level of NLEM drugs in quantitative terms, in any of the three years preceding the induction of foreign investment, and appropriate information in the form and manner as prescribed by the administrative ministries concerned will have to be supplied.
Secondly, the research and development (R&D) expenses annually incurred by the investee company at the highest level in the three preceding years to induction of foreign investment will be maintained in value terms annually over the next five years, post-induction of FDI and provide the information in this regard to the administrative ministries concerned.
Thirdly, the administrative ministries concerned and the FIPB secretariat will be provided complete information pertaining to transfer of technology, if any, along with induction of foreign investment into the investee company.
Of the major approvals in the pharma sector, the largest chunk of Rs.800 crore as FDI inflow is accounted for by Mumbai-based Pfizer, which proposes to induct foreign equity in an operating-cum-investing company. Likewise, Arch Pharmalabs of Mumbai has proposed to bring in Rs.372.36 crore through induction of foreign investment in an existing company.
B Braun Singapore Pte Ltd. has also received the go-ahead for acquisition of shares of a company engaged in the business of life-saving intravenous fluids and ophthalmic products. The transaction entails an FDI inflow of about Rs.248.40 crore. Bangalore-based Sutures India Pvt. Ltd. plans to bring in Rs.200 crore by inducting foreign investment in an existing company. Among other significant approvals, Sterlite Networks Ltd., based in Dadar & Nagar Haveli, has been permitted to engage in additional activities pertaining to the telecom sector. The proposal approved envisages an inflow of Rs.500 crore.
