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December 2011

Press Note No. 3 (2011 Series) — D/o IPP File No.: 1/16/2010-FC-I, dated 8-11-2011 — Review of the policy on Foreign Direct Investment in pharmaceuticals sector insertion of a new paragraph 6.2.25 to ‘Circular 2 of 2011-Consolidated FDI Policy’.

By Gaurang Gandhi, Chartered Accountant
Reading Time 1 mins
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Presently, Foreign Direct Investment (FDI), up to 100%, under the automatic route, is permitted in the pharmaceuticals sector. This Circular has made the following changes, with immediate effect, to the said policy:

(i) FDI, up to 100%, under the automatic route, will continue to be permitted for greenfield investments in the pharmaceuticals sector.

(ii) FDI, up to 100%, will be permitted for brownfield investments (i.e., investments in existing companies), in the pharmaceuticals sector, under the Government approval route. As a result, ‘Circular 2 of 2011 — Consolidated FDI Policy’, dated 30-9-2011, issued by the Department of Industrial Policy & Promotion stands amended with the insertion of the following new Para
6.2.25: 

6.2.25       Pharmaceuticals     
6.2.25.1   Greenfield                        100%       Automatic
6.2.25.2    Existing companies          100%       Government

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