India Entry for Pharma and Medical Device Companies
Pharma and medical devices are open to foreign investment, but the route depends on whether you build new or buy an existing business, and your products need regulatory licences.
Foreign investment rules
As we understand the current FDI policy, new pharmaceutical projects, called greenfield, are open to 100% foreign ownership on the automatic route. For existing pharmaceutical companies, called brownfield, the automatic route stops below full ownership, and a larger stake needs government approval. Medical devices are generally open to 100% on the automatic route.
The thresholds and conditions are revised from time to time, so confirm them against the current FDI Policy before you sign any agreement. If you plan to acquire an existing manufacturer, the brownfield rules, the target's licences and the competition law thresholds all need review during due diligence. Investors from countries sharing a land border with India need approval under Press Note 3 in every case.Licences are separate from FDI
Permission for foreign ownership does not authorise you to make or sell a drug or device. Products need approvals from the Indian drug and medical device regulators, and manufacturing sites need their own licences. The regulatory timeline is often longer than the corporate one, so plan both in parallel.
Typical steps include registering the product, licensing the manufacturing site, and meeting quality and inspection requirements. Apply for site licences only after the legal entity and premises exist, but prepare dossiers while the company is being incorporated. If you will import finished products, you also need an import licence and a local authorised agent. Starting regulatory work late is the most common cause of delay we see in this sector.Structure and state incentives
Most foreign pharma and device companies use a wholly owned private limited company, or acquire an existing one. Both sectors are priority sectors for several states, and some states have dedicated pharma parks or clusters, so location can reduce capital cost materially.
Compare states on land cost, utilities, effluent treatment access, skilled labour and incentive terms. Karnataka's policy, for example, lists an advanced pharma park at Kolar, and Gujarat's 2026 policy lists bulk drugs, active ingredients and medical devices among its focus sectors. See our state incentive guides, and check current terms with the state before relying on them.Intellectual property and customs
Patents, trademarks and know-how licences should be protected before technology is transferred to India. Royalty and technical fee payments from the Indian company to the parent also need transfer pricing support and correct withholding tax treatment, so the licence terms matter from the start.
Register trademarks and patents in India before launch, and document the licence between the group and the Indian entity. On the trade side, imported equipment, raw materials and finished goods are subject to customs rules and, for some items, regulatory clearances. See IP registration and customs compliance for support in each area. Agreeing who owns improvements made in India, and whether the Indian company may sub-license, avoids disputes later when the business is sold or restructured.How A2 Consultants helps
A2 Consultants sets up the Indian entity, structures the investment under the FDI policy, files the foreign exchange reports, and then handles tax, payroll and compliance as your ongoing partner. We act as one point of contact, so licences, banking and tax registrations move in parallel rather than one after another.
A typical engagement starts with a call in which a partner reviews your sector, home country and timeline. We recommend an entity and investment route, prepare the incorporation and FDI filings, open the bank account and tax registrations, and set up monthly compliance. Where a sector licence or state incentive is involved, we run that application alongside the incorporation. See India company setup and FDI structuring, or contact a partner.This page is general information, not legal or tax advice. Rules and incentive terms change by notification, so confirm the current position before committing capital.