How has the pharma sector in India fared when it comes to attracting foreign direct investments?
The government’s concerted push towards the pharma sector through initiatives such as Make in India, Ayushman Bharat Scheme, National Digital Health Mission etc, has cemented India as a leading global capital market. The total market size of the Indian pharma industry is expected to reach $130 billion by 2030. And with access to large consumer markets, generation of new employment opportunities, increase in research and development and rise in net foreign exchange earnings, the Indian, as well as foreign businesses, are betting big on the sector. The cost of manufacturing in India is approximately 33 per cent lower than that of the US making it a suitable marketplace for investors to invest more in the country. The increasing FDI inflows is a reflection of the firm belief by global investors that India will lead as one of the major growth engines coupled with a steady spate of market reforms. The pharma sector is well poised and is attracting FDI and exploiting the many opportunities that COVID-19 has created.
Can you give a ranking across industries?
According to me, these are industries that are currently “hot-bed” for investments.
Pharma
Hospitality
Construction development
Automobiles
Energy
What role have policies like Make in India etc played when it comes to attracting foreign capital?
The dedicated efforts from the government’s end through initiatives like Make in India has definitely spurred up foreign investment. The Government has taken many steps to reduce costs and bring down healthcare expenses. The Government of India unveiled ‘Pharma Vision 2020’ to make India a global leader in end-to-end drug manufacture. Approval time for new facilities has been reduced to boost investment. The recent initiative announced by the government regarding production linked incentive (PLI) scheme for the pharma industry worth Rs 15,000 crore ($2.04 billion) will also promote domestic manufacturing of critical key starting materials (KSM), drug intermediates, and active pharmaceutical ingredients (APIs) making India a leading supplier. In addition, the thrust on rural health programmes, lifesaving drugs and preventive vaccines also augurs well for the pharma companies.
Has there been any change in FDI sentiment post the COVID-19 pandemic, given that pharma and vaccine companies in India have ramped up supply chains from medicines to vaccines to PPEs for exports after satisfying national needs?
The crisis put forth by the COVID-19 pandemic has definitely changed the FDI sentiment. The pharma sector has gained much of the global attention, with many global players opting to move their operations out of China, and therefore India with its growing market and economical workforce, offers to be a strong alternative contender. India has a distinct advantage in this area and the Indian government is also pushing for reforms and rolling out the red carpet for businesses looking to invest in India.
You founded FDI India in 2015. How many deals/worth of FDI have been facilitated in the past six years?
FDI India is enabling financial strength to its clients by handholding them in the investment lifecycle right from pre-investment to after-care. Through our platform, we are helping Indian businesses to obtain loans in a seamless and hassle-free manner and also an easy way to generate inquiries and get investment from foreign investors. Till now, we have facilitated 10-12 deals in pharma companies which include companies including medicine manufacturing, API device manufacturing, medical devices etc.
Which countries are part of FDI India’s potential investor network?
Our potential investor network is spread across 15 countries which includes Singapore, Malaysia, Australia, the UK, the US, Germany, Italy, Canada, and Ireland among others.
What is the average ticket size of investment in the pharma sector that FDI India has facilitated?
We have enabled pharma companies to obtain soft loans with a minimum ticket size of Rs 50 crores.
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