Tightening the norms, the government has done away with automatic approval of foreign direct investment (FDI) in the existing pharmaceutical companies.
After six months, it will be the monopoly watchdog Competition Commission of India (CCI) which will vet such deals.
The decision follows directions from Prime Minister Manmohan Singh who, along with his senior Cabinet colleagues, had deliberated on October 10 over concerns arising out of several acquisitions of domestic pharmaceutical companies by overseas firms.
FDI into the existing firms will be subject to the government approval. "FDI upto 100 per cent would be permitted for brownfield investments in the pharmaceuticals sector, under the Government approval route," a Department of Industrial Policy and Promotion (DIPP)
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