Cabinet defers decision on FDI in pharma

NEW DELHI: The Union Cabinet deferred a proposal for changes in the foreign direct investment ( FDI) policy for the pharmaceutical sector that seeks to bar foreigners from taking control of manufacturing facilities for critical care drugs.

"The commerce and industry ministry requested for the deferment of all the three proposals. Most likely, the Cabinet will take up these issues later this week," an official said.

The Cabinet also did not take up a proposal to liberalise FDI norms for the housing sector. The strategy for the WTO ministerial conference in Bali next month was also not discussed. Several departments, including the Department of Industrial Policy and Promotion (DIPP), have raised concerns about Indian drugmakers being acquired by global firms.

DIPP has proposed reducing the FDI cap in "rare or critical pharma verticals" to 49% from 100%. The department also proposed conditions for foreign firms such as mandatory investment in research & development and no non-compete clauses in the shareholders' pact.