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Price controls hurting FDI in medical devices
Why is it in news?
- Blanket implementation of price controls has contributed to a drastic fall in Foreign Direct Investment (FDI) in the medical device sector from $439 million in 2016 to $66 million in 2018.
More in news
- Official data: Data released by the Government Department for Promotion of Industry and Internal Trade clearly show this decline which has happened even though FDI is allowed through automatic route.
- Not specific to industry:(1) Some scholars argued that this fall in this sector, it cannot be attributed only to the price control in India.(2) It is always seen that around the election year there is a fall in FDI in all sectors. This is also a growing sector.
- 100% FDI:(1) In 2015 the Centre approved 100% FDI in the medical devices sector via automatic route.(2) Previously medical devices, which came under the pharma sector, could take in 100% FDI through automatic route only in case of new ventures.
Source
The Hindu