US envoy raises IPR, taxation issues with India

Outgoing US ambassador to India Nancy J. Powell today urged India to engage with it on some of "difficult discussions" concerning intellectual property rights (IPR) and taxation even as the American government is set to prepare its annual trade review report - Special 301 - in which it might label India as having the worst IPR regimes in the world.

"We ask that India engage with the United States, at senior and working levels, to have those difficult discussions on issues such as intellectual property rights and taxation," Powell said while addressing the annual general meeting of the American Chamber of Commerce (AMCHAM) here today.

US had been extremely critical of some of India's trade and industrial policies. It alleges that the government's insistence on mandatory domestic content requirement in some sectors is adversely impact American companies present here.

Powell highlighted that while it is "strongly opposed to forced local content requirements", it will continue to help India in strengthening its manufacturing sector.

India, on the other hand, today said that its IPR regime is complaint with the global trading norms under the World Trade Organization's (WTO) agreement on Trade Related Aspect of Intellectual Property Rights (TRIPS).

"The Indian IPR regime is most robust and TRIPS complaint. Ever since the TRIPS was signed in 2005, almost 85 per cent were owned by American companies. And in the case of India, it has done only one case of compulsory licensing where 95 per cent of Indian patients were out of reach. We reward innovation and ready to handhold the US companies," underscored Amitabh Kant, secretary, department of industrial policy and promotion (DIPP), ministry of commerce and industry.

The tiff over IPR between India and US got heightened last year in April when the Supreme Court rejected patent application made by Swiss company Novartis for its cancer drug, Glivec.

American companies, especially in the pharma sector, were already upset since the controller general of patents, designs and trademarks decided to grant compulsory license to Natco Pharma to produce and sell generic versions of Bayer-Onyx's cancer drug, Nexavar.

Special 301 is a trade and industry practices report maintained by the Office of the US Trade Representative. In that report US designates certain countries under two categories - 'Priority Foreign Country' and 'Priority Country'. This is meant for the IPR violators and offenders.

However, the first designation is meant for those countries which are worst offenders and might face trade sanctions in future. India was last designated as 'Priority Foreign Country' in 1994 under President Bill Clinton. This year again there are chances that India might be labeled as 'Priority Foreign Country' although India has been in the list of 'Priority Country' since 1974.

This year the report is expected to be released on April 30.

US companies present during the AMCHAM AGM today such as PepsiCo, General Electric and HP also raised concerns over the country's IPR and taxation regime.

US-India bilateral trade in goods and services has reached almost $95 billion in 2013 from $29 billion in 2004, registering an annual growth rate of 15 per cent each year.