Abstract: The Indian pharmaceutical sector has come a long way, being almost non-existent at the time of independence to a prominent provider of healthcare products, meeting almost all the pharmaceutical needs of the country. Over the years, India has become an attractive investment destination for FDI. The study undertakes the task of assessing the current scenario of FDI in the Pharmaceutical sector in India. With the help of available relevant secondary data, a qualitative approach was followed for the study. It was found that the major factors that are attracting FDI in pharmaceutical sector are: increase in domestic demand, rise in outsourcing activities, growth in healthcare financing products, demand in the generics market, demand from emerging segments, large numbers of forthcoming patent expiries, dry pipeline of new drugs. But simultaneously, there are some challenges which this pharmaceutical industry is facing, for example: low government expenditure on healthcare, inadequate investment in healthcare infrastructure rural areas, lack of proper policy framework to attract larger FDI in healthcare sector, especially in the area of research and development, focus on price-controlling policy, lack of robust policies governing IPRs, lack of data protection, bureaucratic hurdles. There might be more technology transfer in the future when the IPRs are protected. It is possible that under the new patent laws, MNCs will start to outsource even patented drugs in India; consequently there will be larger scope for technology transfer spillovers in the future. It is in the interest of the state to provide public policies and a sound economic environment to encourage benefit from FDI.
Keywords: Pharmaceutical, FDI, Pharma, India, U.S.
Title: Foreign Direct Investment in Indian Pharmaceutical Industry: An Assessment
Author: Nidhi Tewathia
International Journal of Social Science and Humanities Research
ISSN 2348-3164 (online), ISSN 2348-3156 (Print)
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