The extant FDI policy in the pharmaceutical sector allows 100% FDI on the automatic route for greenfield investment. 100% FDI is allowed for brownfield investment on the government approval route. In order to ensure availability and affordability of essential medicines and to maintain a reasonable level of research and development expenditure, government has prescribed appropriate conditionalities for approvals under the government approval route. Further, with a view to protecting the domestic pharmaceutical sector, including the production of generics, the Government has decided that 'non-compete' clause would not be allowed except in special circumstances with the approval of the Foreign Investment Promotion Board. Government has also put in place mechanisms like the Drug Price Control Order and the National Pharmaceutical Pricing Authority to address the issue of affordability and availability of medicines.
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