Dinesh Kamath's Editorial 'Open up pharma sector to FDI' that was published in Newsband

Open up pharma sector to FDI

When the Telecom sector was opened up to Foreign Direct Investment (FDI) there was a barrage of opposition particularly from the left parties citing reasons that ranged from national security to losing jobs in the govt. sector. The pharma sector opening up will have far reaching consequences in the lives of the millions in the country. The drugs must be affordable to the people and the sector should not be left to the vagaries of the market. The govt. should play an interventionist role here. And it is in the drug industry that the MNCs are immediately interested due to better prospects.

As far as the pharma sector is concerned, many life saving drugs are not manufactured and distributed in India even by the MNC pharma companies having manufacturing infrastructure in India. The patients who are in dire need of such medicines with regular and assured supplies have to depend on their limited foreign sources to get them imported, by paying exorbitant customs duties. To help them overcome such difficulties, the GOI should convince those who want to directly invest in pharma sector to allocate a specified percentage of such investments for manufacturing such drugs in India, as a part of their corporate social responsibility. As an incentive to such investments, the profit earned from the sale of such life saving drugs in India, can be allowed to be repatriated without any tax in India. This will also be in tune with the Make in India policy with the achievement of a social goal of making life saving drugs easily available in the domestic market at affordable prices.

India now NEEDS BRAIN POWER combined with Local resources that would generate Jobs to the 400 million underemployed Human resource. When all doors are closed, the government should turn to foreign investors to maintain the momentum. The foreign investors have much more capital, expertise and experience in taking up these big ticket investments. There is going to be glut of investors in pharma sector particularlyh, since profits can be realized in quickly. The govt has its task cut out. It should carefully choose an investor who can give the best possible service without jacking up the price.