Mylan’s proposed acquisition of Agila has finally been given the green light by the Indian government.

In February, the US generics major announced that it was buying the Agila injectables businesses from India’s Strides Arcolabs for $1.6 billion in cash. However, Indian authorities put the acquisition on hold earlier this summer, claiming that cancer drugs made by Agila could be exported,thus reducing supplies domestically.

The Indian government is working on plans to amend its policy on foreign direct investment in the pharmaceutical sector in order to protect domestic generics makers from acquisition by multinationals. In August, Commerce and Industry Minister Anand Sharma said "there are some concerns, particularly with regard to oncology, injectables and vaccines, where we see there is a critical need which must be met at all cost”.

Despite government fears, however, Mylan has now received approval from India's Foreign Investment Promotion Board and also from the Cabinet Committee on Economic Affairs. The transaction is now expected to close in the fourth quarter of 2013, subject to remaining regulatory approvals and certain closing conditions.

Mylan chief executive Heather Bresch said “we are very pleased to have received all outstanding Indian pre-merger regulatory approvals for the Agila transaction, especially considering the increased government regulation and oversight with respect to foreign investment in India”. She added that the acquisition “will establish Mylan as a global injectables leader, with a significantly expanded and strengthened injectables portfolio, pipeline, platform and capabilities”.