100% FDI is Permitted in Pharmacutical Sector

RBI/2014–15/441

A.P.(DIR Series) Cir­cu­lar No. 70

Feb­ru­ary 02, 2015

To

All Category‑I Autho­rised Deal­er Banks

Madam / Sir,

For­eign Direct Invest­ment in Phar­ma­ceu­ti­cals sec­tor — Clarification

Atten­tion of Autho­rised Deal­ers Cat­e­go­ry — I (AD Cat­e­go­ry — I) banks is invit­ed to A.P. (DIR Series) Cir­cu­lar No.124 dat­ed April 21, 2014 and the For­eign Exchange Man­age­ment (Trans­fer or Issue of Secu­ri­ty by a Per­son Res­i­dent Out­side India) Reg­u­la­tions, 2000, noti­fied vide Noti­fi­ca­tion No.FEMA 20/2000-RB dat­ed May 3, 2000, as amend­ed from time to time. In terms of Sched­ule 1 to the Noti­fi­ca­tion ibid, For­eign Direct Invest­ment (FDI) up to 100 per cent is per­mit­ted under auto­mat­ic route for green­field invest­ments and FDI up to 100 per cent is per­mit­ted under Gov­ern­ment approval route for brown­field invest­ments (i.e. invest­ments in exist­ing com­pa­nies) in phar­ma­ceu­ti­cals sector.

1. The extant FDI pol­i­cy for phar­ma­ceu­ti­cal sec­tor has since been reviewed and it has now been decid­ed with imme­di­ate effect that there would be a spe­cial carve out for med­ical devices which was ear­li­er giv­en the same treat­ment as phar­ma­ceu­ti­cal sector.

2. A copy of Press Note No.2 (2015 Series) dat­ed Jan­u­ary 6, 2015 issued in this regard by Depart­ment of Indus­tri­al Pol­i­cy and Pro­mo­tion, Min­istry of Com­merce & Indus­try, Gov­ern­ment of India is enclosed.

3. AD Cat­e­go­ry — I banks may bring the con­tents of the cir­cu­lar to the notice of their customers/constituents concerned.

4. Reserve Bank has since amend­ed the sub­ject Reg­u­la­tions accord­ing­ly through the For­eign Exchange Man­age­ment (Trans­fer or Issue of Secu­ri­ty by a Per­son Res­i­dent out­side India) (Amend­ment) Reg­u­la­tions, 2015 which have been noti­fied vide Noti­fi­ca­tion No.FEMA.334/2015-RB dat­ed Jan­u­ary 9, 2015, vide G.S.R. No. 30(E) dat­ed Jan­u­ary 14, 2015.

5. The direc­tions con­tained in this cir­cu­lar have been issued under Sec­tions 10(4) and 11(1) of the For­eign Exchange Man­age­ment Act, 1999 (42 of 1999) and are with­out prej­u­dice to per­mis­sions / approvals, if any, required under any oth­er law.

Yours faith­ful­ly,

 (J K Pandey)

Gen­er­al Man­ag­er Officer-in-Charge