Global Innovation Policy Center

India – The Outlier on Intellectual Property

With one of the globe’s largest economies, India is leading the way in a variety of industries. From software to biotech to textiles, India boasts an array of successful, growing businesses that provide a model for other developing nations. Unfortunately, the only thing standing in India’s path as a leader in innovation is India itself. When it comes to intellectual property (IP) protection, India comes in last.

Today, the House Ways and Means Trade Subcommittee is holding a hearing to discuss the growing trade relationship between the United States and India and the dramatic economic growth that India has experienced over the last few decades. While India’s economic ascent has been nothing short of miraculous, it is imperative that India take into account the importance of ensuring adequate IP rights as they consider expanding their trade and investment relationships globally.

Much of India’s success has been a product of increased domestic and foreign investment. However, due to inadequate protections for IP, many businesses investing capital in India face serious challenges that undermine the companies’ ability to compete and succeed in this vital market. While insufficient enactment of enforcement of IP rights dissuades foreign investment, the instability of India’s IP system also limits growth and opportunities for India’s domestic creative and innovative industries.

Last year, the U.S. Chamber’s Global Intellectual Property Center (GIPC) released an International IP Index (GIPC Index), Measuring Momentum. The Index set out to create an IP roadmap for key countries around the world to assess their IP systems in order to accelerate economic growth, create jobs, and improve foreign investment.

Out of the 11 countries surveyed, where did India fall? India came in last.

There have been a few positive developments in the IP space, like the release of the Draft National IPR Strategy and expansion of ex officio authority. But for every step forward, it seems there are two steps back, and there have been repeated erosions of the IP climate. This week marks the one year anniversary of the issuance of India’s first ever compulsory license, in part, because the product was imported and not manufactured locally. With this decision, the Indian government delivered a significant blow to the pharmaceutical industry, whose success depends largely on the protection of patents for the medicines that they invest significant time, research, and resources to create. Additionally, India recently revoked a patent for a medicine that holds a valid patent in over 90 other countries. Further, while the passage of the Copyright Bill was, in theory, a positive step, in practice it largely ignored industry’s call to increase IP protection and does not achieve the intended purpose on implementing the WIPO copyright treaty.With such significant economic growth in the past two decades, it is easy to look at the foreign investment in India and assume that the situation is fine. However, the reality is that there is significant untapped potential if the government passes adequate laws to counter the rampant piracy, both physical and via the Internet.

India has proven to be an open and innovative economy. Stronger protection of IP throughout India will benefit India’s citizens with greater choices and creative industries with an array of opportunities. Imagine the economic growth that could occur and the new innovative technologies that could be discovered if India had sufficient IP protections in place.

We hope today’s hearing will highlight the challenges that industries across the board face when dealing with the IP regime in India, and we look forward to addressing these challenges with both the U.S. Government and the Indian Government.