New Delhi: The Foreign Direct Investment (FDI) equity inflow into the pharmaceutical sector has reported multifold growth during the first quarter of the current fiscal year, after registering a 48 per cent decline in the fiscal 2023-24 as compared to the previous year.
The April to June quarter of 2024-25 has reported a growth of 162 per cent to $236 million, as compared to $90 million during the same period of previous fiscal year.
The cumulative foreign equity infusion into drugs and pharmaceuticals sector from April 2000 to June, 2024 is $22.76 billion, which is over three per cent of the total FDI inflow into the country during the period.
Out of the total FDI equity inflow of $695.16 billion till June, 2024, services sector accounted to over 16.33 per cent of the total FDI equity inflow in US Dollar terms, followed by computers and software & hardware (15.2%), trading (6.31%), telecommunications (5.72%), automobile industry (5.27%), construction (infrastructure) activities (4.98%), construction development including townships, housing, built up infrastructure and construction development projects (3.83%), drugs and pharmaceuticals (3.28%), chemicals (other than fertilizers) (3.27%), and non-conventional energy (2.72%) between April, 2000 to June, 2024.
In Rupee terms, the growth during the quarter was over two fold, to Rs. 1,971 crore, as compared to Rs. 743 crore during the corresponding period of previous fiscal year. The cumulative FDI inflow from April, 2000 to June, 2024 is Rs. 1,36,852.19 crore, according to the data from the ministry of commerce and industry.
The growth during the first quarter of the current fiscal year, as compared to the same quarter of 2022-23, however, has reported a decline. The quarter of April to June, 2022 registered FDI inflow of $497 crore (Rs. 3,844 crore).
It may be noted that the FDI inflow during the fiscal 2023-24 has reported a decline of 48.3 per cent. This came after a 46 per cent growth reported in the fiscal year 2022-23.
According to data from the ministry of commerce and industry, the foreign equity fund infusion into the sector for the fiscal year 2023-24 stood at $1.06 billion, as compared to $2.06 billion in the previous fiscal year of 2022-23. The fund inflow in the fiscal year 2021-22 was $1.41 billion.
The fund inflow has been on a decline through all the four quarters of the fiscal year 2023-24 as compared to the corresponding quarters a year ago.
In Rupee terms, the FDI inflow was almost 47 per cent at Rs. 8,844 crore in FY24, as compared to Rs. 16,654 crore in the previous fiscal year.
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.
