Overruling the Department of Industrial Policy & Promotion's (DIPP's) opposition on allowing foreign direct investment (FDI) in brownfield pharma units, Prime Minister Manmohan Singh on Friday paved the way for Mylan's proposal to acquire Strides Arcolab's injectables subsidiary.

In July, the Foreign Investment Promotion Board (FIPB) gave a green signal for Nasdaq-listed Mylan's proposal to acquire Agila Specialties for $1.6 billion (nearly Rs 10,000 crore). But, the DIPP opposed the proposed deal and asked the government to review its decision of allowing FDI India's rare and critical domestic drug manufacturing units.

As the prime minister has overruled the DIPP's opposition on the matter, Mylan's FDI proposal is now expected to gain the Cabinet committee of Economic Affairs' (CCEA's) approval soon.

After the meeting, Commerce & Industry Minister Anand Sharma said, "There are some concerns particularly in regard to oncology injectibles, some of the vaccines where we feel that critical needs must be met at all costs... if there are safeguards required that will be discussed."

FIPB has so far approved a total of 12 FDI proposals in the country's brownfield pharma units. With the overruling of the DIPP's oppostiton by the prime minister, all those proposals are now expected to be cleared by the government.