New Delhi: The Modi government is concerned by the dip in foreign investments in the pharmaceutical sector, and is planning an overhaul to attract investors.
The government plans to create a single-window clearance procedure under a separate division in the Department of Pharmaceuticals to focus only on bringing in foreign direct investment (FDI).
At present, investors have to take permissions and licences from several departments under the state and central governments.
“A new desk is proposed to be created under the Bureau of Pharma PSUs of India (BPPI), the agency that handles Jan Aushadhi Scheme. It will be responsible for boosting FDI in pharma in India,” a senior official from department, which comes within the purview of the Ministry of Chemicals and Fertilisers, told ThePrint.
Recent data released by the Department for Promotion of Industry and Internal Trade showed that FDI in the pharma sector stood at $266 million for the year ending March 2019, a huge dip from $1.01 billion in the same period the previous year — a 74 per cent drop.
“Despite India being a lucrative destination for investors due to low-cost production and huge benefits of economies of scale, investors are shying away. They might need hand-holding and easy interactions,” another official working on the FDI plan said.
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What’s the plan?
Sources said the government has started reviewing countries in groups to plan its strategy, beginning with Japan, Saudi Arabia, China and Russia.
“We have a help desk named ‘Invest India’, which may soon start reporting directly to the pharma secretary. The idea is to route all the investment queries that come to the help desk directly to the most senior official,” the first officer quoted above explained.
“After receiving the query, it will be forwarded to the new department, which is tentatively called ‘Bureau of Pharmaceuticals’,” the officer said.
“BoP will be single window for investors where the government will help them get all clearances and licences. The investor won’t deal with separate state governments, which is perceived as a headache. The BoP will take all approvals from state and central governments on behalf of the investor.”
The new bureau will also plan regular interactions with countries to attract investors and plan road shows.
In 2016, the Modi government had allowed up to 74 per cent FDI in the existing pharmaceutical companies through the automatic route. Earlier, 100 per cent FDI was permitted through the government approval route.
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