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FDI equity inflow into pharma sector grows to $520 million in H1FY25
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Gireesh Babu, New Delhi
December 11 , 2024
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The Foreign Direct Investment (FDI) equity inflow into the pharmaceutical sector has reported multifold growth during the first half of 2024-25, after registering a 48 per cent decline in the fiscal 2023-24 as compared to the previous year.
The April to September quarter of 2024-25 has reported over four fold growth to $520 million, as compared to $117 million during the same period of previous fiscal year.
The cumulative foreign equity infusion into drugs and pharmaceuticals sector from April 2000 to September, 2024 is $23.05 billion, which is 3.25 per cent of the total FDI inflow into the country during the period.
The second quarter ended September, 2024 reported almost ten fold growth in fund infusion as compared to the same period of previous year. The quarter from July to September, 2024 grew almost tenfold to $284 million, as compared to $27 million reported during the same period last year.
The April to June quarter of the fiscal year had reported a growth of 162 per cent to $236 million, as compared to $90 million during the same period of previous fiscal year.
Out of the total FDI equity inflow of $708.7 billion till September, 2024, services sector accounted to over 16.25 per cent of the total FDI equity inflow in US Dollar terms, followed by computers and software & hardware (15.11%), trading (6.51%), telecommunications (5.64%), automobile industry (5.25%), construction (infrastructure) activities (4.97%), construction development including townships, housing, built up infrastructure and construction development projects (3.78%), drugs and pharmaceuticals (3.25%), chemicals (other than fertilizers) (3.23%), and non-conventional energy (2.82%) between April, 2000 to September, 2024.
In Rupee terms, the growth during the first half of the fiscal year was almost four fold, to Rs. 4,349 crore, as compared to Rs. 964 crore during the corresponding period of previous fiscal year. The cumulative FDI inflow from April, 2000 to September, 2024 is Rs. 1,39,229.79 crore, according to the data from the ministry of commerce and industry.
For the quarter ended September, 2024, the fund infusion was of Rs. 2,378 crore, as against Rs. 221 crore
It may be noted that the FDI inflow during the fiscal 2023-24 has reported a decline of 48.3 per cent. This came after a 46 per cent growth reported in the fiscal year 2022-23.
According to data from the ministry of commerce and industry, the foreign equity fund infusion into the sector for the fiscal year 2023-24 stood at $1.06 billion, as compared to $2.06 billion in the previous fiscal year of 2022-23. The fund inflow in the fiscal year 2021-22 was $1.41 billion.
In Rupee terms, the FDI inflow was almost 47 per cent at Rs. 8,844 crore in FY24, as compared to Rs. 16,654 crore in the previous fiscal year.
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.
After the abolition of Foreign Investment Promotion Board (FIPB) in May 2017, the Department of Pharmaceutical (DoP) has been assigned the role to consider the foreign investment proposals under the government approval route.
Apart from this, the department considers all FDI proposals of pharmaceutical sector and medical devices sector, according to an announcement in April 17, 2020, wherein investors/ultimate beneficiaries of the proposals are from the countries sharing land border with India.
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