Brushing aside Anand Sharma-led Commerce Ministry's concerns over allowing 100 per cent foreign direct investment (FDI) in greenfield and brownfield drug-manufacturing companies, the congress-led government has decided to make no change in the current FDI policy for the pharmaceutical sector.

The Commerce Ministry had urged the government to impose a cap of 49 per cent on FDI in greenfield and brownfield drug manufacturing companies, along with some safeguards, arguing that it could push many drugs or medicines out of the reach of the poor.

But, the Cabinet decided to continue with the current policy for the pharmaceutical sector, albeit with a condition.

A statement by the government said, "The Cabinet decided that the current policy in brownfield and greenfield . will continue, subject to the additional condition that in all cases of FDI in brownfield pharma, there will not be any non-compete clause in any of the inter-se agreements."

While foreign investments in greenfield projects are allowed via the automatic route, any investment in brownfield or existing drug manufacturing facilities are allowed only after it gains approval from the Foreign Investment Promotion Board (FIPB).

While the Commerce Ministry as well as Health Ministry has repeatedly proposed harsher rules and a lower cap on FDI in brownfield projects, various other ministries, such as P Chidambaram-led Finance Ministry, have always opposed any such proposals.