Keeping in view the need to encourage more investment in this important sector to achieve the future demands likely to be placed on it in order to meet the growing needs of the country as well as to promote exports. it is proposed to treat the entire drugs and pharmaceutical sector as a high priority industry for the purposes of permitting foreign investment in terms of Appendix-III of the New Industrial Policy. It is also proposed to treat companies with foreign equity upto 51 per cent on par with wholly Indian companies. It may also be mentioned that at present companies with foreign equity upto 40 percent are already enjoying this facility and in the circumstances mentioned above there is no need to place any fresh curbs on their activities. Similarly, it is felt that automatic approval for foreign technology agreements can be permitted for all items in the Drugs is and Pharmaceuticals sector to encourage the introduction of newer and more efficient technologies, subject to their fulfilling the standard conditions laid down in the Industrial Policy. However, keeping in mind the levels of technology already available in the country, it is necessary to consider proposals involving foreign equity participation above 51 percent on merits of each case.