 "Govt retains 100% FDI in existing pharma units")
The Department of Industrial Policy and Promotion (DIPP) said however that as far as the contentious issue of non- compete clause is concerned, the Foreign Investment Promotion Board (FIPB) will take a view on it on case-by-case basis.
"The government has reviewed the position in this regard and decided that the existing policy would continue with the condition that 'non-compete' clause would not be allowed except in special circumstances with the approval of the FIPB," the DIPP said in a Press Note.
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It had said the continuous acquisition of Indian pharma companies will severely impact availability and affordability of generic medicines in the country, and asked for a reduction in the FDI cap to 49% from 100% in rare or critical pharma verticals.
However, the Union Cabinet at its meeting dismissed the DIPP concerns.
In September, the government cleared the Rs 5,168-crore deal of the US-based Mylan Inc for acquiring Bangalore-based pharma firm Agila Specialties, a subsidiary of Strides Arcolab.
In 2008, Japanese firm Daiichi Sankyo had bought out the country's largest drug maker Ranbaxy for $4.6 billion. US-based Abbot Laboratories had acquired Piramal Health Care's domestic business for $3.7 billion.
DIPP had said that over 96% of the total FDI in the sector between April 2012 and April 2013 has come into the brownfield pharma, or existing projects and companies.
India permits 100% FDI in pharma through automatic approval route in the greenfield, or new projects.