FDI Inflows to Drugs and Pharmaceuticals

FDI Inflows to Drugs and Pharmaceuticals industry in India has grown over the last few years due to the several incentives that have been provided by the Indian government. The increase in FDI Inflows to Drugs and Pharmaceuticals industry in India has helped in the growth of the sector.

Drugs and pharmaceuticals industry in India:

As per the estimates of 2004 the drugs and pharmaceuticals industry of India was worth 8.8 billion US dollars, contributing 1.3% to India's GDP. The domestic market in the drugs and pharmaceuticals industry in India is worth more than US$ 4.8 billion. The industry of drugs and pharmaceuticals in India is highly fragmented with more than 3,000 medium and small sized producers.

The major domestic companies in the drugs and pharmaceuticals industry of India are Ranbaxy, Dr. Reddy's, and Cipla. The major international companies having presence in the industry of drugs and pharmaceuticals in India are Johnson & Johnson, Novartis, Pfizer, and Glaxo SmithKline.

FDI policy in the drugs and pharmaceuticals industry in India:

The government of India has allowed foreign direct investment up to 100% through the automatic route in the drugs and pharmaceuticals industry of the country, on the condition, that the activity should not fall into the categories that require licensing.

Amount of FDI inflows to drugs and pharmaceuticals industry in India:

The amount of FDI Inflows to Drugs and Pharmaceuticals industry in India came to US$ 109 million in 2003- 2004. In 2004- 2005 this figure increased to US$ 292 million and in 2005- 2006 this figure stood at US$ 172 million.

FDI inflows have encouraged drugs and pharmaceuticals industry in India:

The increase in FDI Inflows to Drugs and Pharmaceuticals industry in India has helped in the expansion, growth, and development of the industry. This in its turn has led to the improvement in the quality of the products from the drugs and pharmaceuticals industry.

Last Updated on 4/23/2011