The Foreign Direct Investment (FDI) into drugs and pharmaceuticals industry in the first half of fiscal year 2022-23 has reported a 25 per cent growth compared to the foreign equity inflows in the same period of previous year. FDI infusion into hospitals and diagnostic centres has gone up by 44 per cent, while infusion into medical and surgical appliances posted almost one and a half fold growth during the first half of the current fiscal year compared to the same period last year, according to data from the ministry of commerce and industry.
The FDI inflow into the drugs and pharmaceuticals sector has crossed a cumulative figure of $20 billion between April, 2000 and September, 2022 reaching a $20.10 billion by the end of September, this year. The foreign investment into the sector during the six months from April to September, 2022 was $699 million as compared to $559 million reported during the same period of previous year.
During the quarter from July to September, 2022, the fund infusion into the sector was $202 million, with a 52 per cent decline from the $429 million foreign fund inflow reported into the sector during the same period of previous fiscal year. However, the first quarter of the fiscal, from April to June, 2022 has reported a fund inflow of $497 million, with a multifold jump from $130 million fund infusion in the same quarter last year.
The FDI inflow into hospital and diagnostic centres has gone up 44 per cent during the first half of the current fiscal year, to $475.31 million as compared to $329.16 per cent during the same period of last year. The quarter from July to September, 2022 witnessed one of the highest FDI infusions into the sector from at least April, 2021, at $310.84 million. This is against $155.16 million reported in the same period from July to September, 2021.
The cumulative FDI inflow into hospital and diagnostic centres from April, 2000 to September, 2022 is reported at $8.4 billion, attracting an equity inflow of $843.67 million from the cumulative $7.55 billion reported in the sector from April, 2000 to September, 2021, according to the data.
The foreign fund inflow into the medical and surgical appliances sector has seen an increase of 158 per cent in the first half of the current fiscal year, to $337.04 million as compared to $130.66 registered during the same period of fiscal year 2021-22.
The quarter from July to September, 2022 reported a decline in fund inflow at $31.69 million compared to $103.2 million registered in the same quarter of last year. However, the April to June, 2022 fund inflow into the sector was $305.35 million as against a meagre $27.46 million during the same period of previous year, and has boosted the growth for the first half of the current fiscal in comparison with the funding in the same period of previous year.
The cumulative foreign fund inflow into the segment from April, 2000 to September, 2022 was at $2.74 billion, which has reported a fund infusion of $414.42 million from the $2.32 billion cumulative investments reported from April, 2000 to September, 2021.
FDI in pharmaceuticals is one of the top ten attractive sectors for foreign investment in India and has 3.27 percentage of the total FDI inflow cumulatively, till September, 2022.
Foreign investments in pharmaceuticals in greenfield projects are allowed up to 100 per cent under the automatic route and for brownfield pharmaceutical projects, foreign investment beyond 74 per cent to up to 100 per cent, government approval is required.
After the abolition of Foreign Investment Promotion Board (FIPB) in May 2017, the Department of Pharmaceutical (DoP) has been assigned the role to consider the foreign investment proposals under the Government approval route.
Apart from this, the Department considers all FDI proposals of pharmaceutical sector and medical devices sector, according to an announcement in April 17, 2020, wherein investors/ultimate beneficiaries of the proposals are from the countries sharing land border with India.
An online portal, namely, “FDI linked Compliance Monitoring Portal” has been developed by the department to monitor progress of FDI inflows received by the Indian companies in the pharmaceutical sector and ensure compliances of FDI linked performance conditions as required under the extant FDI Policy.
Ranked as third worldwide for production by volume and 14th by value, the Indian pharmaceutical industry occupies 60 per cent of the world's vaccines and 20 per cent of generic medicines globally. It has the highest number of US Food and Drug Administration compliant pharma plants outside of USA and is home to more than 3,000 pharma companies with a network of over 10,500 manufacturing facilities.
India is the source of 60,000 generic brands across 60 therapeutic categories and manufactures more than 500 different active pharmaceutical ingredients (APIs). The Government of India has approved incentives worth Rs 21,940 crore ($3 billion) to improve the capabilities and capacity of the industry. The pharma market in the country is expected to reach $65 billion by 2024 and $130 billion by 2030, with an expected growth rate of 11-12 per cent between 2020 and 2030, according to the government data.
|