The panel has urged the government to immediately stop any further takeover or acquisition through the brownfield route. (Agencies)
"The committee feels that the pharmaceutical industry is one sector of the economy which has to be dictated by public good rather than foreign investment, profit and revenue," said Shanta Kumar, chairman of parliamentary standing committee on commerce which on Tuesday released its report on FDI in pharmaceutical sector.
The committee in the report said that it is "surprised" to find that since 2006-07, seven prominent pharma companies have been acquired by foreign companies at highly over-valued price.
"It appears that 100 percent FDI in the pharmaceutical sector has been conveniently used as instrument by multinational companies to gain a monopoly over Indian market and to destroy India's technological capability to produce generic medicines," the committee said.
According to Reserve Bank of India data, between April 2012 and April 2013, as much as USD 989 million FDI was received in brownfield investment, and a mere USD 87.3 million in greenfield projects.
Currently, India permits 100 percent FDI in the pharmaceutical sector through the automatic approval route in new projects, while foreign investment in existing pharmaceutical companies is allowed only with the FIPB's approval.
The panel has urged the government to immediately stop any further takeover or acquisition through the brownfield route.