The US-India Business Council (USIBC) will lead an executive delegation to India this week to discuss trade-led growth as a strategy for India's economic rise. This comes amid controversy over media reports that the government had privately assured USIBC that it will not issue patent-disabling Compulsory Licenses (CL).
USIBC will deliberate with the stakeholders and Indian government on a study, which among other things, recommended “stronger” Intellectual Property Rights (IPR) protection in India to boost Foreign Direct Investment (FDI) inflows.
CL is the grant of permission by the government to entities to use, manufacture, import or sell a patented invention without the patent-owner’s consent. USIBC is a premier business advocacy organisation for strengthening India-US economic and commercial ties.
The study the USIBC will cite in its discussions in New Delhi from April 6 to 8, was released in September 2015 by Washington DC-based think tank Peterson Institute for International Economics. It was partly funded by USIBC.
During the three-day visit, the USIBC will also hold talks on the importance of India’s membership in the Asia-Pacific Economic Cooperation (APEC), which also includes the US and 20 other Pacific Rim countries. APEC advocates free trade in the region.
Recently, a Bill was introduced by the U.S. Congress to help India gain APEC membership.
USIBC will also push for India and the U.S. to expeditiously ink a Bilateral Investment Treaty (BIT) with specific clauses on Investor-State Dispute Settlement and provisions limiting governments from expropriating (or the act of government forcibly taking private property citing public interest) the investments made by foreign investors when there is a dispute.
USIBC president Mukesh Aghi had told The Hindu in December last year that many US-based multinationals and pension funds were mulling mega investments in India in sectors such as infrastructure, but were concerned over “inadequate” protection of their investments under the current laws.
They, therefore, wanted India and the US to soon sign a BIT. Aghi said an effective BIT would also enable more direct investments from the U.S. into India, instead of their being routed through Mauritius and Singapore (for tax and other benefits).
Terming IPRs the ‘most contentious issue in India’s trade policy’, the Peterson Institute study said India had sought to exploit the flexibility in the Trade-Related Aspects of Intellectual Property Rights (TRIPs) agreement in the WTO by using CL, occasionally denying patent protection and adopting regulatory obstacles to dilute the protection.
“Because of India’s strong consumer groups and its generic drug industry, Indian law, though strengthened considerably to implement the TRIPs agreement, tends to favour weaker rather than stronger protection of IPRs,” the study said.
It said India was transitioning from being a net user of technology (which favours weak IPRs) to being a producer as well (which favours stronger IPRs). The Indian drug industry itself is evolving toward companies with greater focus on R&D.
