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The Foreign Direct Investment (FDI) equity inflow into the drugs and pharmaceuticals sector in the country has reported an almost five fold growth during the first quarter ended June, 2025, as compared to the same quarter, last year.
The April to June quarter of FY 2025-26 witnessed the FDI equity inflow into the sector at around $1.2 billion as compared to $236 million registered in the same quarter of FY25, according to official data.
The cumulative FDI equity inflow into the sector from April, 2000 to June, 2025 stood at $24.61 billion, which is Rs. 1,52,654 crore in Rupee terms.
In Rupee terms, the growth during the first quarter ended June, 2025 was Rs. 10,273 crore, as compared to Rs. 1,971 crore reported in the same period of last year, according to the quarterly fact sheet on FDI inflow from the ministry of commerce and industry.
The multifold growth for the sector has been reported during the quarter when the overall FDI equity inflow for the first quarter of FY26 registered a 15% growth at $18.62 billion (Rs. 1,59,428 crore) as compared to $16.18 billion (Rs. 1,3,959 crore) in the same period of last year.
Out of the cumulative FDI equity inflow from April, 2000 to June, 2025, of $747.6 billion, Services sector accounted to over 16.34 per cent of the total FDI equity inflow in US Dollar terms, followed by computers and software & hardware (15.54%), trading (6.43%), telecommunications (5.36%), automobile industry (5.24%), construction (infrastructure) activities (4.93%), construction development including townships, housing, built up infrastructure and construction development projects (3.64%), drugs and pharmaceuticals (3.29%), chemicals (other than fertilizers) (3.13%), and non-conventional energy (3.08%) between April, 2000 to June, 2024.
It may be noted that the first quarter of FY25, ended June, 2024, itself had a multifold growth at $236 million compared to $90 million registered during April to June, 2023.
The foreign equity infusion into the Indian pharma sector has hit a five year-low at $891 million in FY25, around 16% decline from the $1.06 billion reported during the previous fiscal year.
This was a decline for the second consecutive year, with the fund infusion coming down 48.3% to $1.06 billion in the year 2023-24, as compared to $2.06 billion in FY 2022-23. The foreign fund infusion in FY 2022-23 was a 46% growth from $1.41 billion in 2021-22, according to official data.
In FY25, for the first time in the last five years, the inflow has declined to below $1 billion. In Rupee terms, the FDI inflow during 2024-25 was at Rs. 7,500 crore, as compared to Rs. 8,844 crore during the previous fiscal year, reporting a 15.2% decline.
During the quarter ended March 31, 2025, the fund inflow reported almost 40% decline to $91 million as compared to the $151 million in the same period last year. In Rupee terms, the inflow was 36.5% down at Rs. 795 crore during the quarter as against Rs. 1,252 crore in the corresponding quarter of 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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