New Delhi : The Foreign Direct Investment (FDI) inflows into the drugs and pharmaceuticals sector for the first half of the current fiscal year has surpassed the whole year inflow of foreign equity into the sector registered in 2019-20.
The cumulative FDI inflow into the sector in 21.5 years from April, 2000 to September, 2021 is $18.55 billion, according to official data.
According to the quarterly factsheet on FDI released by the Department for Promotion of Industry and Internal Trade (DPIIT), the FDI inflow during the six months from April to September, this year, into the drugs and pharmaceuticals sector was $559 million (Rs. 4,143 crore).
This is higher than the $518 million (Rs. 3,650 crore) registered during the 12 month period from April, 2019 to March, 2020.
Considering that the foreign investment inflow into the sector was only $130 million during the first quarter of the current fiscal, the second quarter from July to September 2021 has registered over three fold growth of $429 million in three months.
The growth during the six months from April to September, 2021 was 52 per cent compared to $367 million registered during the same six months of 2020.
For the year 2020-21, the sector has seen an FDI inflow of $1.49 billion (Rs. 11,015 crore) which was a significant two-fold jump from the investment inflows reported in the previous year.
While the cumulative inflow has grown from $18.12 billion in June, 2021, to $18.55 billion by the end of September, the sector’s percentage share remained at around three per cent of the total FDI inflow into the country. The highest FDI inflow is attracted in the services sector including financial, banking, insurance, non-financial, outsourcing, R&D, courier, technology testing and analysis and others, at 16 per cent of the total inflows, followed by Computer Software and Hardware (14%), Telecommunications (7%), Trading (6%) and Automobile industry (5%) of the total FDI equity inflows into the country.
The Medical and Surgical Appliances sector has reported an FDI inflow of $103.2 million during the three months from July to September, 2021, taking the cumulative FDI inflow into the sector from April 2,000 to September, 2021 to $2.33 billion (Rs 14,526 crore). The cumulative FDI inflow into the sector till June, 2021 was $2.22 billion (Rs 13,761 crore).
Scientific instruments, though not specific to drugs and pharmaceuticals sector, has seen the cumulative FDI inflows growing to $296.65 million (Rs 1,810.23 crore) till the end of September, 2021, as compared to $287.75 billion (Rs 1,745.38 crore) cumulative figures till the end of September, 2020.
The Department of Pharmaceuticals has recently said that it has disposed of two FDI applications in September, and currently has 16 pending applications for FDI for consideration.
The Centre has allowed 100 per cent FDI in pharmaceuticals in India under the automatic route for green-field pharma. Hundred per cent FDI in Drugs and Pharmaceuticals in India is allowed in brownfield pharma, wherein 74 per cent FDI is permitted under the automatic route and after that through government approval.
The country supplies 62 per cent of the global demand for various vaccines, 40 per cent of the generic market in the US and 25 per cent of all medicine in the UK. India has around 20 per cent market share of generic medicines in terms of volume in the global pharmaceutical sector.
India is the source of 60,000 generic brands across 60 therapeutic categories and manufactures more than 500 different active pharmaceutical ingredients (APIs). The export of generic drugs is one of India’s core strengths. The country’s pharmaceutical exports stood at $24.44 billion in FY 20-21. The industry has granted incentives totaling Rs. 21,940 Crore ($ $3 million), according to the statistics from the Government of India.
