Government raises FDI limit in pharma companies

Q.  Government has raised FDI level in brownfield pharma to what percent under the automatic route to attract capital and technologies in the pharmaceutical sector?
- Published on 28 Jul 16

a. 74
b. 49
c. 50
d. 56

ANSWER: 74
 
Government of India has raised FDI limit in pharmaceutical companies to attract and retain latest technologies, capital and follow international best practices.
  • FDI cap in brownfield pharma was recently raised to 74 percent under the automatic route from 49 percent earlier.
  • Beyond 74 percent, foreign investment is permitted under the approval route for attracting capital and technological advancement.
  • Government has also put in place necessary safeguards by providing non-compete clause will not be permitted.
  • Indian promoters will operate in the same line of business in new ventures.
  • Close to 3088 Industrial Entrepreneurs Memorandum were signed between January 2015 and July 2016 envisaging an investment of INR 4.8 lakh crore.
  • Close to 427 IEMs were signed in the electrical equipment sector followed by textiles and food processing.
  • Maximum IEMs were inked in Maharashtra followed by Gujarat, Karnataka and Telangana.

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