FDI in pharma via automatic route a welcome step: Biocon

She says she is aware of concerns with regards to healthcare sector and drug prices going out of control if FDI is unrestricted but one has to trust the flagship sector.Below is the verbatim transcript of Kiran Mazumdar Shaw’s interview with Reema Tendulkar and Nigel D'Souza on CNBC-TV18. Reema: Would you like to comment how much of a relief will be provided, if 49 percent foreign direct investment (FDI) is provided via the automatic route? A: Personally, I believe that investment in any sector should not be restricted to a 49 percent level. Certainly this is better than what it was in the past, but we need to be very confident of our own sector. I think the pharma sector is a flagship sector for India and we should be far more about allowing higher levels of FDI than restricted to a 49 percent, because it achieves nothing very significant by restricting it to 49 percent level. Nigel: What are the current restrictions on FDI? What are the rules currently? A: Well, currently I think any kind of investment in pharmaceutical has to go through the Foreign Investment Promotion Board (FIPB) route and that was not conducive for the sector because there is a huge interest in the Indian pharma sector and we should be very free to allow FDI in this sector without having any kind of restrictions, because no other sectors in the technology space has got these kind of restriction. I know that there are concerns about the healthcare sector going out of control and drug prices going out of control, is if they were to allow unrestricted investment in the pharmaceutical space, but we need to have far more confidence in our flagship sectors than being restrictive in terms of capping such investments. Reema: Because it is now easier to invest that 49 percent only in pharmaceutical companies do you expect more FDI to flow through? A: I certainly think so, because I think this is a step in the right direction for sure, going through a 49 percent cap through the automatic approval route is a welcome step and I think certainly there is going to be inflow of capital, because I think the Indian pharmaceutical sector is a very successful sector and there is a lot of interest given the kind of global advantages that we have in pharmaceutical manufacturing, so I would see a great deal of interest in investing in this sector and I do welcome this automatic approval rate, but with a caveat saying that I hope that they even increase this 49 percent restriction.