Pharmaceutical sector is very important and knowledge-based sector of any country and this sector has come a long way to fulfill the basic needs of the people by providing them various healthcare products. FDI inflows is very important to a developing country especially India because of many reasons which is discussed in this paper. In pharmaceutical sector, the current scenario of FDI inflow is very attractive as compared to earlier years but there is need of constant increase of investment in this sector which serves the pharmaceuticals needs of the country. For this, policies should be improved and updated time by time. We don’t need only investment but we have to learn how to maximise its gain to a greater extent which is also discussed in this paper. This paper talks about the current situation of FDI in pharmaceutical sector and the present policy regarding the FDI in this sector. As we know a coin has two sides, FDI also has some disadvantages along with many advantages and it also has been discussed in this paper. This paper analyse the relation between FDI and pharmaceutical sector with regard to the role of FDI in this sector.