Indian pharmaceutical companies continue to receive approval from the Foreign Investment Promotion Board (FIPB), a national agency of Government of India that provides a single window clearance for proposals on Foreign Direct Investment (FDI) in India, despite the fact that there is a lot debate on the issue. During the first quarter of the year, six companies received the FIPB nod for FDI to the tune of $137 million (Rs 745 crore). Shantha Biotechnics and Edict Pharmaceuticals got the highest FDI approval of $95 million (Rs 514 crore ) and $32 million (Rs 171.53 crore), respectively. The other leading names include Aptuit Laurus ($8.79 million) and Softgel Healthcare ($1.83 million).

The FIPB has given its nod to these companies as they proposed to increase foreign equity in brownfield pharmaceutical sector to carry out research, development, manufacturing and marketing of recombinant DNA-based products and bio-generics, transfer of 100 percent equity to foreign investor, to carry on the business of drug discovery and development.

At the same time, the FIPB has deferred the proposals of few companies who are looking at infusion of foreign investment in an existing company engaged in the business of manufacturing, research and development for technology advancement, and marketing of pharmaceutical finished dosage formulations, undertaking research and development focused on developing and producing various types of dosage forms of active pharmaceuticals, sale and distribution of solid dose products and other products, focusing on contract research and manufacturing services and carrying out the business of drug discovery and development. In all, six proposals have been deferred in the last three meetings of the FIPB since January 2012.

The proposals deferred by the FIPB since January include those of Ordain Health Care Global of Chennai, Apotex Research of Bangalore, and Ankur Drugs, Pharma, Arch Pharmalabs and Plethico Pharmaceuticals of Mumbai.

Though a comprehensive data on FDI in pharma, with regard to acquisition of companies by multi-nationals, is not maintained by the Ministry of Commerce & Industry, the ministry said FDI equity inflows, of $341.49 million, have been recorded under the acquisition route in the drugs and pharmaceuticals sector between April 2009 and February 2012.