This is unlikely to stem the flow of new products, given the intense competition. The government needs to tread carefully on the way it draws up the rules.For starters, if foreign firms having technical collaboration with Indian ones are prevented from setting up their own companies, it may lead to an increase in the cost of technical collaboration. Foreign firms will be reluctant to part with their technology, preferring, instead, to set up shop themselves. If the rules prevent foreign companies with existing joint ventures from setting up new firms, this will penalise those foreign firms which have already established themselves in the country. Late-comers will thus be rewarded. The definition of competing products needs to be considered carefully. For instance, will a firm making toilet soaps be allowed to set up a separate venture for detergents? The Indian market will continue to attract foreign firms, and policies must be designed to extract maximum mileage from out of this.