Pharma & Healthcare in India
Pharma & Healthcare Company Registration in India: FDI & PLI
India is one of the world's largest suppliers of generic medicines, and its FDI rules for pharmaceuticals reflect a deliberate policy balance — genuinely open for new manufacturing capacity, more carefully controlled for acquisitions of existing Indian producers. Understanding which side of that line your investment falls on shapes both your approval route and your timeline.
Quick answer
What is the FDI limit for a pharmaceutical company in India?
It depends on whether the investment is greenfield or brownfield. A new (greenfield) pharmaceutical project can take 100% FDI under the automatic route, with no government approval required. Acquiring or investing in an existing (brownfield) pharmaceutical company is capped at 74% under the automatic route — any investment above that requires government approval.
Greenfield vs brownfield: the core FDI distinction
A greenfield pharmaceutical project — building new manufacturing or business capacity from the ground up — can take 100% FDI under the automatic route, with no prior government approval required. Brownfield investment — acquiring or investing in an existing Indian pharmaceutical company — is capped at 74% under the automatic route; any investment above that threshold requires government approval. This distinction was introduced after a wave of acquisitions of domestic pharma companies raised concerns about the continued availability of essential medicines, ongoing R&D and technology retention within India.
Conditions on brownfield investment
Brownfield FDI — under both the automatic and government approval routes — carries specific conditions: the acquired company must maintain its existing production levels of essential medicines and their supply to the domestic market at the time the FDI is made, maintain its existing R&D spend, and disclose full information relating to any technology transfer involved in the deal. These conditions apply on top of the standard approval or automatic-route process, so they need to be factored into deal timelines and documentation from the outset.
PLI scheme incentives for pharmaceuticals
Government incentives for pharma manufacturing run in two parallel schemes. The PLI Scheme for Bulk Drugs carries a total outlay of ₹6,940 crore, targeted at reducing India's import dependence on Key Starting Materials, Drug Intermediates and Active Pharmaceutical Ingredients. The separate PLI Scheme for Pharmaceuticals, covering finished formulations, carries a ₹15,000 crore outlay. Both sit alongside — not instead of — the broader manufacturing incentives covered in our manufacturing company registration guide, including the Section 115BAB concessional 15% tax rate, but only for companies that meet its conditions, including the 31 March 2024 manufacturing commencement deadline. New projects should not assume this rate is available.
Choosing your entity and incorporation process
Most foreign pharma and healthcare companies incorporate a Wholly Owned Subsidiary for greenfield projects, since it is taxed as a domestic Indian company and can access both the 100% automatic FDI route and PLI incentives. The core incorporation sequence — DSC and DIN issuance, name reservation via SPICe+ Part A, drafting your MOA and AOA, and SPICe+ Part B filing — is the same as for any Indian private limited company; see our step-by-step incorporation guide for the full walkthrough. Company incorporation is separate from, and a prerequisite to, the drug-specific manufacturing and sale licences issued by state drug control authorities and, for certain products, the Central Drugs Standard Control Organisation.
FAQs: pharma & healthcare company registration in India
What is the FDI limit for a new (greenfield) pharmaceutical company in India? A greenfield pharmaceutical project — a new manufacturing or business facility built from the ground up — can take 100% FDI under the automatic route, meaning no prior government approval is required.
What is the FDI limit for acquiring an existing (brownfield) pharmaceutical company? Brownfield investment — acquiring or investing in an existing pharmaceutical company — is permitted up to 74% under the automatic route; any investment above 74% requires government approval. Brownfield deals also carry specific conditions, including maintaining the acquired company's existing production of essential medicines and R&D spend at the time of the FDI, and disclosing any technology transfer involved.
Is there a government incentive scheme for pharmaceutical manufacturing? Yes, in two parts. The PLI Scheme for Bulk Drugs has a total outlay of ₹6,940 crore to reduce import dependence on Key Starting Materials, Drug Intermediates and Active Pharmaceutical Ingredients, while the separate PLI Scheme for Pharmaceuticals (finished formulations) carries a ₹15,000 crore outlay. Eligibility and application windows vary by product category, so mapping your specific products against both schemes is worth doing early.
What entity structure should a foreign pharma or healthcare company use in India? Most foreign pharmaceutical and healthcare companies incorporate a Wholly Owned Subsidiary for greenfield projects, since it is taxed as a domestic Indian company and can access the 100% automatic FDI route plus PLI incentives. Brownfield acquisitions above 74% require structuring the investment through the government approval route from the outset, which changes both the timeline and the documentation required.
Do drug manufacturing and sale in India require separate regulatory licences beyond company registration? Yes. Company incorporation under the Companies Act is separate from, and a prerequisite to, the drug-specific licences required to actually manufacture or sell pharmaceutical products — including manufacturing licences from the state drug control authority and, for certain products, Central Drugs Standard Control Organisation approval. These regulatory licences are applied for once the company exists.
How much does it cost to register a pharma or healthcare company in India? The MCA government filing fee for the SPICe+ incorporation form itself is nil for authorised capital up to ₹15 lakh, under Schedule I of the Companies (Registration Offices and Fees) Rules, 2014. What you actually pay is state stamp duty, which varies by which Indian state you register your office in, plus professional fees — separate from the drug-specific manufacturing and sale licence fees that apply once the company exists. We quote incorporation cost as a fixed figure once we know your structure and state.
Next step
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