Foreign Direct Investments (FDI) in Healthcare & Diagnostics Sector in India-1: Lawyers Advice on Foreign Investments in India | Law Firm for Foreign Investments in India | FDI Attorney in India | India Business Entry | Legal Advice for Foreign Investors in India

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Entering Indian Market:
• Foreign entities can enter the Indian market under the automatic route provided in the FDI Policy. FDI upto 100% shall be allowed for manufacturing of medical devices under the automatic route. 100% FDI shall be allowed in construction-development of hospitals under the automatic route.
• Acquisition of existing shares
• Capital Investments
• Technology and Healthcare Tie-Ups
• Collaborative Ventures including hospitals, medical equipment, training and education

Best Locations:
• Odisha (Jagatsinghpur, Bargarh, Bhubaneshwar)
• Rajasthan (Bhilwara, Jhalawar, Kota)
• Delhi

Achievements made by Indian Corporations or in India:
• According to the Department for Promotion of Industry and Internal Trade (DPITT), the hospital and diagnostic centres attracted Foreign Direct Investment (FDI) worth US$ 6.625 billion between April 2000 and December 2019.
• According to the Ministry of Health and Family Welfare, India and Cuba signed a Memorandum of Understanding (MoU) for enhanced co-operation in the healthcare sector.
• According to the Ministry of Chemicals and Fertilizers, Indian Drugs and Pharmaceuticals Limited (IDPL), Gurgaon modernized for mass production of drugs for diabetes, oncology, nephrology and cardiology.

Demand in the Market:
• Demand of around 80% of medical devices in India are met by imports, out of which 30% is supplied by the United States.
• The Indian medical device market is worth an estimated $9 billion and is expected to reach $14 billion by the end of 2025, making it the fourth largest medical device industry in Asia.
• Imports constitute 50% of the medical equipment market. Diagnostic equipment’s for example equipment’s for blood sugar, blood pressure testing, etc. are also a fast-growing segment which is expected to increase to 90 million by 2025.

Existing Notable Players in the Indian Market- Domestic:
• Apollo Hospitals Enterprise Limited.
• Fortis Healthcare Limited.
• Tata Group
• Dabur

Applicable Laws:
• Drugs and Cosmetic Act, 1940 and Rule, 1945: This act regulates the import, manufacture and distribution of drugs in India with the objective that the drugs are safe, effective and comply with the quality standards.
• Narcotics Drugs and Psychotropic Substances Act, 1985: The act prohibits a person from producing, manufacturing, storing, selling, purchasing or/and consuming any narcotic drug or psychotropic substance.
• Bio-Medical Waste (Management and Handling) Rules, 1998: These rules apply to persons who collect, generate, store, receive, dispose, transport or handle bio medical waste of any form.
• Medical Termination of Pregnancy Act, 1971: The act provides for the termination of certain pregnancies by a registered Medical Practitioner and any other matter connected therein.
• Pre-Conception and Pre-Natal Diagnostic Techniques Act, 1994: This act provides for the prohibition of selection of sex and prevention of regulation of prenatal diagnostic techniques for detecting any abnormalities or disorders which could lead to female foeticide.

Documents and Agreements:
• If a foreign company has acquired an immovable property in India for carrying out a permitted activity, (like establishing a hospital) then such non-resident entity or person concerned must file a declaration in Form IPI with the Chief General Manager, Foreign Exchange Department, (Foreign Investment Division), Reserve Bank of India (RBI), within 90 days from the date of such acquisition.
• An Indian company receiving foreign investment must report the following documents of the inflow to the Reserve Bank of India (RBI) before 30 days from the date of receipt:
i) The name and address of the foreign investors
ii) The date of receipt of funds in foreign currency and in rupees.
iii) The Authorised Dealer’s name and address through whom the funds have been received, and
iv) Any details regarding Government approval for the investment.
• Any company incorporated outside India, and willing to open a Branch Office in India shall have to make an application in form FNC-1 to the Reserve Bank of India, along with the following documents:
i) Certificate of Incorporation or Memorandum of Association (MOA) & Articles of Association (AOA) attested by Notary in the country of incorporation or registration.
ii) The entity’s latest Audited Balance Sheet must also be submitted.
Authored By: Adv. Anant Sharma