Compliance watch-outs
Quality inspections, price rules and US tariffs drive most of the risk for foreign investors in the sector. The sources single out six compliance areas, set out below, followed by the trade and regulatory points that shape the outlook.
Brownfield pharma conditions
Deals in existing pharma companies must keep production of National List of Essential Medicines (NLEM) drugs and R&D spend at the highest level of the three years before the deal, for five years. Technology-transfer details go to the ministry, and non-compete clauses need Government approval. Foreign ownership above 74% in a brownfield pharma company is on the Government route, decided by the Department of Pharmaceuticals through the Foreign Investment Facilitation Portal before closing. Medical devices are exempt from these conditions. See FDI rules.
Land-border ownership
A beneficial owner from a land-border country holding over 10%, or holding control, moves a deal to the Government route whatever the activity, and later changes into such ownership need prior approval. Since Press Note 2 (2026) took legal effect on 2 May 2026, a stake within 10% and without control can use the automatic route, with prior reporting. See land-border investors.
Schedule M enforcement
The MSME grace period for revised Schedule M good manufacturing practice, which applied to units with turnover below ₹250 crore, ended on 31 December 2025. CDSCO has asked states to inspect units and act against non-compliance. An investor buying an existing plant should establish its compliance status; a new plant should be designed to revised Schedule M from the start.
Price control
Ceiling prices under the Drugs (Prices Control) Order 2013 apply to scheduled formulations drawn from the National List of Essential Medicines 2022, and are set by the National Pharmaceutical Pricing Authority. Device trade margins are also rationalised. Check portfolio exposure before launch.
Marketing to doctors
The Uniform Code for Pharmaceutical Marketing Practices 2024, notified on 12 March 2024, sets ethical norms for interactions between pharma companies and healthcare practitioners. Industry associations handle complaints. Promotion plans, sponsorship and samples should be aligned with the code from launch.
Scheme end dates
Budget 2026-27 funds bulk drug parks (₹700 crore; extended to FY2026-27) and device parks (₹50 crore; extension to March 2028 sought). RPTUAS’s approved period ended in FY2025-26. The three PLI schemes have selected their beneficiaries, with incentives ending in FY2027-28 (pharma), FY2028-29 (bulk drugs) and FY2026-27 (devices). An investment case that depends on a central scheme should be tested against these dates; see central incentives.
Trade and regulatory outlook
US tariffs on patented medicines
From 29 September 2026 the US 100% tariff on specified patented medicines, imposed under Section 232, covers more companies. Generics and their ingredients are outside it. Qualifying speciality medicines from India, one of 20 eligible jurisdictions, may get zero duty. Export-oriented plants should map which products, if any, fall inside the tariff.
Faster test licences
Amendments to the New Drugs and Clinical Trials Rules 2019, notified on 20 January 2026, cut the statutory timeline for test licences from 90 to 45 days. The health ministry expects at least 90 days saved in drug development.
Biopharma money awaits guidelines
Biopharma SHAKTI (₹10,000 crore over five years) was announced in Budget 2026-27, but operating guidelines are awaited and applications cannot open until they are issued.
UK market access
The India–UK Comprehensive Economic and Trade Agreement entered into force on 15 July 2026, giving zero-duty access for about 99% of India’s exports to the UK, with a social security agreement in force the same day.
What to check next
- For any brownfield pharma target, pull three years of NLEM production and R&D spend data before pricing the deal.
- Trace beneficial ownership through funds and holding companies for land-border citizens, including planned future changes.
- Obtain evidence of revised Schedule M compliance, or an inspection record, for any plant you acquire.
- Map the portfolio against NLEM 2022 and DPCO 2013 before launch, and review promotion against UCPMP 2024.
- Check US tariff exposure for patented exports and follow scheme status on the updates feed.