The IPR stand-off

Behind India's confrontation with the US on intellectual property

Last week the office of the United States Trade Representative, or USTR, announced on its website that it is initiating a long-threatened "out-of-cycle review" of India's intellectual property rights (IPR) regime. The announcement drew a sharp and quick response from New Delhi - unsurprising, given the timing of the USTR decision. It came just weeks after Prime Minister Narendra Modi's visit to the United States, which was supposed to reduce the irritants that have crept into the Indo-American trade relationship of late. It seems that the visit was less effective than was hoped at first. In the joint statement that was released by Mr Modi and United States President Barack Obama, both countries agreed to set up a high-level intellectual property working group under the existing Trade Policy Forum. This seemed to be a revival of the Innovation and Creativity Focus Group formed in 2010 but had remained inert till now. This was meant for regular consultations on improving IPR protection and enforcement, enhancing awareness of IPR, fostering innovation and creativity, and increasing collaboration between the United States and Indian innovators.

The Indian government's position remains that the United States should not take "unilateral" action when it comes to India's IPR regime. The USTR resisted considerable pressure earlier this year and kept India off the list it reserves for the world's worst IPR offenders. New Delhi wants Washington to keep making this effort, while it explains its IPR policy through bilateral working groups such as the one mentioned in the agreement between Messrs Modi and Obama. Commerce Minister Nirmala Sitharaman has also said that a comprehensive IPR policy is being worked on in India, to help settle disputes such as that with the United States. In any case, few can claim that India's IPR regime violates the multilateral Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, which actually allows very wide latitude to national policymakers. This is why most Indian IPR decisions go unchallenged in international forums. India's law is particularly strong on what New Delhi sees as safeguarding national interests - in particular, it goes an extra mile to shield the interests of local industry by utilising the many flexibilities allowed under the TRIPS. Much of the anger in the United States came following decisions in India - one by the administration and the other by the judicial system - that militated against the interest of multinational pharmaceutical companies. Yet, whatever the larger wisdom of those decisions, one things seems clear: they were not supposed to be part of a broader pattern of violation of international norms on IPR. Yet India appears to have so far signally failed to convince international business or other countries of this fact.

It is in the context of this failure to communicate that the current stand-off between New Delhi and Washington should be evaluated. Will India benefit more from its current stated stand, of non-cooperation with any investigation that does not come under the framework agreed by the two heads of government? Or will more communication reduce the chances that the USTR will come to a conclusion that harms Indian commercial and consumer interests?