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FDI equity inflow into pharma sector grows 74% in first nine months of FY26
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Gireesh Babu, New Delhi
March 17 , 2026
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The Foreign Direct Investment (FDI) equity inflow into the drugs and pharmaceuticals sector in the country has reported a 74% growth during the first nine months of the fiscal year 2025-26, as compared to the same period of last year.
The nine months from April to December, 2025, witnessed the FDI equity inflow into the sector at around $1.39 billion as compared to $800 million registered in the same period of FY25, according to official data.
The equity inflow into the sector, however, declined almost 58% during the third quarter ended December 31, 2025, at $118 million as compared to $280 million recorded during the corresponding period of previous fiscal year.
The cumulative FDI equity inflow into the sector from April, 2000 to December, 2025 stood at $24.81 billion, which is Rs. 1,54,389 crore in terms of Indian currency.
In rupee terms, the growth during the first nine months ended December, 2025 was around 79%, at Rs. 12,008 crore, as compared to Rs. 6,705 crore reported in the same period of last year, according to the quarterly data on FDI inflow from the ministry of commerce and industry.
The growth for the sector during the nine months of FY26 comes when the overall FDI equity inflow during the period registered an 18% growth at $47.87 billion as compared to $40.67 billion registered in the same period of last year.
Out of the cumulative FDI equity inflow from April, 2000 to December, 2025, of $776.8 billion, Services sector accounted to over 16.38 per cent of the total FDI equity inflow in US Dollar terms, followed by computers and software & hardware (15.63%), trading (6.56%), telecommunications (5.17%), automobile industry (5.11%), construction (infrastructure) activities (4.93%), construction development including townships, housing, built up infrastructure and construction development projects (3.53%), drugs and pharmaceuticals (3.19%), non-conventional energy (3.15%), and chemicals (other than fertilizers) (3.08%).
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.
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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