Problem and Prospect of FDI inflows in Indian Pharmaceutical Industry

Abstract

The development of Indian talent and adoption of managerial techniques by domestic firms has made India a preferred destination of FDI. This is a positive spiral of the spillover effects of FDI. Due to earlier FDI infusions the human capital has been upgraded which in turn is attracting more FDI. Hence the spillover effects are evident in increasing the productivity of the IPI and have resulted in India gaining respect as a global player. The inflow of FDI in India has experienced considerable growth but compared to other developing nations, India has lagged behind; attracts only about 2% of FDI inflows. In order to reap the maximum benefits from FDI, there is a need to establish a transparent broad and effective enabling policy environment for investment and to put in place appropriate framework for their implementation. It has been noticed that there has been ample opportunity for the concentration of FDI in the sector particularly export and profitability of the sector