The government has stalled the proposal by a Chinese company to buy out Hyderabad-based Gland Pharma amid the standoff between the two countries in Sikkim, according to media reports.
Rejecting the proposal by Shanghai Fosun Pharmaceutical Group (SFP) to buy an 86 percent stake in Gland Pharma for $1.3 billion, the government has raised "genuine concerns" that the technology developed by an Indian company will be passed over to a Chinese company, said a report in The Times of India.
However, according to the report, government officials have denied any link to the standoff between the two companies.
The report cited sources as saying that Gland Pharma is a leader in injectibles, which is a weak area for the Chinese pharma.
India and China have been in a standoff since mid-June when Chinese forces were spotted constructing a road with bulldozers and other heavy equipment in Doklam area claimed by Bhutan, prompting an intervention by Indian troops stationed nearby.
The Doklam plateau lies close to the "Chicken's Neck", a 20-km wide corridor that links India's mainland to its northeastern states. The biggest fear among India's military planners is that a Chinese offensive there could cut off the link.
The standoff has intensified over the last few days, with both countries even warning each other of large scale destruction in case a war breaks out.
Earlier in April, the inter-ministerial body Foreign Investment Promotion Board (FIPB) had recommended the investment proposal to the Cabinet Committee on Economic Affairs (CCEA) for approval.
Gland Pharma is brownfield pharmaceutical company and Shanghai Fosun Pharmaceutical is a publicly listed company in China.
Shanghai Fosun Pharmaceutical's plan was to acquire stake in Gland Pharma through its subsidiaries outside India, namely Fosun Pharma Industrial Ltd, Fosun Industrial Co. Limited, Ample Up Limited, Lustrous Star Limited and Regal Gesture Limited.
(with inputs from agencies)
Published Date: Aug 01, 2017 05:01 pm | Updated Date: Aug 01, 2017 05:01 pm