At the heart of the FDI debate in India is the concern that this would result in the country losing control over the medicines that are needed to serve the poorest sections of society. As a national concern it deserves full respect, but to link foreign investment as an obstacle to its fulfilment is somewhat far-fetched.

Recent examples from the past do not bear this out. In fact they serve to underscore the fact that MNC pharmaceutical firms, some of which have been in India for almost 100 years, have played, and will continue to play a pivotal role in healthcare access and delivery.

Indian companies that divested or sold their businesses to MNC firms did so very profitably, and to the total satisfaction of all concerned. The MNC firms that purchased Indian businesses integrated them into their operations and did so successfully and profitably.

They did not in the name of rationalisation cut off the manufacture of drugs that were needed by the national health programmes. What they did, and did very effectively, was to improve manufacturing practices, augment quality processes and provide funds for research and development with a local focus. They became, in a truer sense than ever, ‘Indian’ companies.

This also led to a higher level of commitment both from a business viewpoint and in terms of social responsibility: lower priced patented products, higher volumes to meet export commitments, skills and training upgrades and participation with Government in public-private programmes to address critical national health needs.

Positive signals FDI in pharma, in general, and in all cases has had a positive impact on the Indian economy. This applies to new wholly-owned projects, 100 per cent purchase of Indian companies as well as an increased stake in existing Indian operations.

Some clear and measurable benefits of this activity are greater access to foreign technology, exchange of international best practices, investment in R&D opportunities for India-specific innovations, boost to supply chains and creation of high-value jobs.

FDI is part of the process of globalisation which allows a cross-flow of capital, ideas and human resources.

This is the correct context in which foreign investment in the Indian pharmaceutical industry should be placed.

The belief that investment in Indian companies by MNC pharmaceutical firms threatens India’s ‘health’ security or that it will in the long run curb supply of cheaper life-saving drugs is erroneous to say the least.

The presence of MNCs adds depth to Indian markets. An MNC acquiring more stakes in India reflects its commitment towards boosting India’s economic growth and sends positive signals globally about India’s economic sustainability.

(The author is Director General, OPPI)

Also read: >Are pharma MNCs good for Indian consumers? - NO

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