‘100% brownfield FDI will kill Indian medical devices sector’
Opposing the government's move to allow 100 per cent FDI in brownfield projects in medical devices, Indian players said such a step would sound the death knell for domestic firms and sought a blanket ban on it.
"Government's decision to allow 100 per cent FDI in brownfield projects will expedite the annihilation of the domestic medical device industry and also make them vulnerable for cherry picking by MNC's," Association of Indian Medical Device Industry (AIMED) said.
AIMED, a body of domestic medical device makers, further urged the government for "immediate blanket ban on 100 per cent FDI in brownfield projects".
The move is also in direct conflict with Prime Minister Narendra Modi's 'Make in India' vision to reduce import dependency and to promote domestic manufacturing for global markets, it added.
"The government needs to have a serious rethink. It is making a same mistake as made in the past which resulted in closure of local manufacturers and prosperity of MNCs," AIMED Forum coordinator Rajiv Nath said.
Already, many Indian manufacturers have made a strategic shift and are now increasingly resorting to imports rather than investing in factories and domestic production, Nath said. Even in
greenfield projects, government needs to ensure and devise a mechanism so that MNCs do not simply set up trading and marketing operations in the sector in India as happened in the past, he added. Last week, the Union Cabinet had eased norms by carving it out from the policy that governs FDI in pharmaceuticals sector and allowed up to 100 per cent FDI in both greenfield and brownfield projects under the automatic route.