India refutes US criticism of its FDI, IPR laws

Also accuses India of not allowing foreign direct investments in some crucial sectors

The US has criticised India, saying it doesn’t have adequate protection for intellectual property rights (IPR), hinting at the recent Supreme Court decision denying a patent to a Swiss pharmaceutical giant.

It has also accused India of not allowing foreign direct investment (FDI) in crucial sectors.

In the report, 2013 National Trade Estimate Report on Foreign Trade Barriers, issued by the office of the United States Trade Representative (USTR), the US accused India of lacking “effective protection against unfair commercial use of undisclosed tests and other data generated to obtain marketing approval for pharmaceutical and agrochemical products.”

Refuting the claims, the commerce ministry said India’s IPR laws were in consonance with its obligations under the TRIPS agreement under the World Trade Organization (WTO).

“The recent decision of the Supreme Court rejecting the patent plea in the Novartis case has reiterated that India’s interpretation of Section 3(d) of the Indian Patent Act has balanced its public health interests with that of innovation. Further, the granting of a compulsory licence to Natco in the case of the Nexavar drug is an indication that India believes its actions are in consonance with the flexibility the TRIPS agreement offers,” a senior commerce ministry official said.

The USTR also said India imposed several barriers in major services industries such as insurance, banking, audiovisual services, accounting, legal services, telecommunications, distribution services, postal and express delivery services. India, which accounted for 12 of the 406 pages in the report, was also criticised for not allowing foreign participation in some of these sectors.

“This is based on India’s national interest. On the contrary, India views with serious concern the steep hike in visa fees under the public law of the US, which has implications for US obligations under the WTO. India believes further liberalisation of the services sector would be possible on a multilateral basis, rather than on plurilateral efforts,” the commerce ministry official said.

On the US accusing India of having a “stringent and non-transparent” FDI policy, the official said this was tantamount to “interfering in the sovereign policy space of India. The report reflects a biased picture on India’s policy requirements in order to protect US export interests and refutes it unequivocally”.