FDI inflow into pharma grows by 25% in H1

Ranked as third worldwide for production by volume and 14th by value, the Indian pharmaceutical industry occupies 60% of the world's vaccines and 20% of generic medicines globally. It has the highest number of USFDA compliant pharma plants outside of USA and is home to more than 3,000 pharma companies with a network of over 10,500 manufacturing facilities

The Foreign Direct Investment (FDI) into the pharmaceuticals and allied sectors in the country has grown by an impressive 25 per cent during the first half of fiscal year 2022-23 compared to the same period of last year. As per the data from the Union Ministry of Commerce and Industry, the FDI inflow into the drugs and pharmaceuticals sector has crossed a cumulative figure of $20 billion between April, 2000 and September, 2022 reaching a $20.10 billion by the end of September, this year. FDI in pharmaceuticals is one of the top ten attractive sectors for foreign investment in India and has 3.27 percentage of the total FDI inflow cumulatively, till September, 2022. Ranked as third worldwide for production by volume and 14th by value, the Indian pharmaceutical industry occupies 60 per cent of the world's vaccines and 20 per cent of generic medicines globally. It has the highest number of USFDA compliant pharma plants outside of USA and is home to more than 3,000 pharma companies with a network of over 10,500 manufacturing facilities.

As per the data, the foreign investment into the sector during the six months from April to September, 2022 was $699 million as compared to $559 million reported during the same period of previous year. FDI infusion into the hospitals and diagnostic centres sector has gone up by a further impressive 44 per cent, while infusion into medical and surgical appliances posted almost one-and-a-half-fold growth during the first half of the current fiscal year compared to the same period last year. In fact, the FDI inflow into the pharmaceuticals and allied sectors has registered an almost three-fold growth in the first three months of the current fiscal year, as compared to the same period previous year. The FDI inflow into the sector is reported at $497 million during the three months from April to June, 2022, the first three months of the fiscal year 2022-23. This is almost three-fold compared to $130 million fund infusion reported in the same three months of last year. When compared to the previous three months from January to March, 2022, the growth is more than double during the quarter. However, the sector attracted FDI inflow of around $208 million during the three months between January and March, 2022.

The growth in the beginning of the current fiscal comes against a slight decline in FDI inflow for the 12 months of 2021-22, which was at $1.41 billion as against a higher $1.49 billion reported in the 12 months of previous fiscal year, between April 2020 and March 2021. During the quarter from July to September, 2022, the fund infusion into the sector was $202 million, with a 52 per cent decline from the $429 million foreign fund inflow reported into the sector during the same period of previous fiscal year. However, the first quarter of the fiscal, from April to June, 2022 has reported a fund inflow of $497 million, with a multifold jump from $130 million fund infusion in the same quarter last year. The FDI inflow into hospital and diagnostic centres has gone up 44 per cent during the first half of the current fiscal year, to $475.31 million as compared to $329.16 per cent during the same period of last year. The quarter from July to September, 2022 witnessed one of the highest FDI infusions into the sector from at least April, 2021, at $310.84 million. This is against $155.16 million reported in the same period from July to September, 2021. The cumulative FDI inflow into hospital and diagnostic centres from April, 2000 to September, 2022 is reported at $8.4 billion, attracting an equity inflow of $843.67 million from the cumulative $7.55 billion reported in the sector from April, 2000 to September, 2021, according to the data. The foreign fund inflow into the medical and surgical appliances sector has seen an increase of 158 per cent in the first half of the current fiscal year, to $337.04 million as compared to $130.66 registered during the same period of fiscal year 2021-22. The quarter from July to September, 2022 reported a decline in fund inflow at $31.69 million compared to $103.2 million registered in the same quarter of last year. However, the April to June, 2022 fund inflow into the sector was $305.35 million as against a meagre $27.46 million during the same period of previous year, and has boosted the growth for the first half of the current fiscal in comparison with the funding in the same period of previous year. The cumulative foreign fund inflow into the segment from April, 2000 to September, 2022 was at $2.74 billion, which has reported a fund infusion of $414.42 million from the $2.32 billion cumulative investments reported from April, 2000 to September, 2021. Foreign investments in pharmaceuticals in greenfield projects are allowed up to 100 per cent under the automatic route and for brownfield pharmaceutical projects, foreign investment beyond 74 per cent to up to 100 per cent, government approval is required.

(The author is a freelance

journalist with varied experience

in different fields)