India’s policies for regulating foreign trade and investment, particularly in the context of intellectual property rights (IPR) affecting the pharmaceutical industry, were in the crosshairs of the US Congress this week, as a lengthy investigation was launched into whether such policies were harming the US economy by discriminating against American firms.
The “fact-finding” investigation on ‘Trade, Investment, and Industrial Policies in India: Effects on the US Economy,’ which kicked off on Wednesday, is being undertaken by the US International Trade Commission upon authorisation by the Senate Finance Committee and the House of Representatives’ Ways and Means Committee.
The launch of the investigation comes in the wake of an increasingly strident tenor of debate on whether India’s IP environment, relating to generic pharmaceuticals and copyright issues linked to music and film piracy, and similar concerns, is “deteriorating,” or whether India is simply prioritising access, for example to life-saving drugs, over commercial profits.
At the heart of the discussion are India’s decisions to deny patents to certain cancer drugs such as Novartis’ Glivec and Bayer’s Nexavar, even as it granted compulsory licenses to domestic producers of generic versions of these drugs.
The USITC process comes a day after the US Trade Representative (USTR) announced that the agency was seeking World Trade Organisation (WTO) dispute consultations with India over the latter’s local content requirements for solar panel manufacturing, which is alleged to discriminate against US producers of solar components.
The investigation also comes as the USTR called for hearings, starting on February 24, to prepare its 2014 “Special 301 Report” on the adequacy of IP rights protection by US trading partners.
In its 2013 report the agency noted, “India remains on the Priority Watch List… [after it made] limited progress in improving its weak IPR legal framework and enforcement system,” further emphasising, “In many areas, however, IPR protection and enforcement challenges are growing, and there are serious questions regarding the future condition of the innovation climate in India across multiple sectors and disciplines.”
Yet, India has challenged some of the arguments underlying such claims, particularly questioning the methodologies used by the US Chamber of Commerce’s Global Intellectual Property Centre (GIPC) in its ‘Global International IP Index,” which ranked India among the lowest of 25 countries worldwide.
The mandate of the bipartisan Commission convening this week is to consider testimonies from a wide range of stakeholders and “enumerate restrictive trade and investment policies that India maintains or has recently adopted, determine which sectors of the US economy are most affected by these policies, and describe the competitiveness of Indian firms in these sectors.”
This week the Commission will hear from 22 members of industry and experts, of whom 12 were said to be likely to emphasise problematic aspects of Indian laws dealing with foreign trade and investment and ten who may speak of their positive attributes.
Among those who may cite concerns with India’s IPR the list of those testifying to the Commission includes the Alliance for Fair Trade with India, the National Association of Manufacturers, the GIPC, the International Intellectual Property Alliance, Pharmaceutical Research and Manufacturers of America and the Biotechnology Industry Organisation.
Organisations that may speak up for the benefits derived from Indian regulations for foreign trade and investment include the Confederation of Indian Industry, the National Association of Software and Service Companies and the Indian Pharmaceutical Alliance.
While Indian embassy representatives are not formally involved in the investigation in Washington, since a sovereign entity such as the Government of India would not subject itself to interrogation by the legislature of a different country, New Delhi has been closely monitoring developments and continued to emphasise that Indian regulations are broadly favourable to foreign trading and investment partners.
The USITC however aims to perform a “quantitative analysis” of the effects of certain Indian policy measures and after its members visit to India to conduct a range of interviews with government officials and private sector stakeholders, it will deliver a report to the Congressional Committees by November 30, 2014.