Washington, Dec 5 (IANS)

The US-India Business Council (USIBC) has welcomed the Indian government's decision to reject a proposal limiting pharmaceutical investment caps to 49 percent in the brownfield investment sector.

"Such a reversal would have sent chilling signals to investors, chased capital to other markets, and prevented domestic companies from growing and collaborating," the trade advocacy group comprising over 350 top-tier US and Indian companies said Wednesday.

"Instead, the decision by the Government of India reassures investors that India is not going back on reforms," the group said.

The announcement will encourage competition and investment in the pharmaceutical sector which will continue to create jobs and ensure that patients receive access to important medicines, it said.

"In our global environment where competition for capital is significant, India's recent announcement to continue to allow investment in the pharmaceutical sector up to 100 percent is a powerful signal that its market reforms remain intact and that India's reform direction is clear," said USIBC President Ron Somers.

"USIBC continues our commitment to working with the Government of India to deepen the US-India trade relationship and the rejection of such a harmful proposal demonstrates that India remains a top investment destination," he said.