Government to set up fund for pharma R&D

To spur research and development in the pharmaceutical sector, the government is mulling a venture capital fund with a corpus of around Rs2,000 crore.

 ''We are considering a proposal of a venture capital fund of Rs 2,000 crore for the drug industry. We are talking with Exim Bank for this,'' commerce minister Anand Sharma told reporters in New Delhi after a performance review of the sector with industry representatives and government officials.

Industry representatives raised several issues at the meeting including problems in obtaining approvals from the health ministry.

According to Sharma, all the concerns of the industry would be addressed by a committee of secretaries, which would include the commerce secretary, Department of Industrial Policy & Promotion secretary and the Drugs Controller General of India.

''We are mindful of the challenges of the sector with regards to financing of R&D, credit costs and duration,'' Sharma said.

The issue of foreign direct investment in the sector also came up for discussion in the meeting.  While 100 per cent FDI has been allowed for  new projects, concerns have been raised over FDI in projects where purchasing equity, or a controlling stake, in an existing company are involved.