US businesses write to Obama against India’s go-local policy

Thomas K. Thomas
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Barack Obama
Barack Obama

As many as 20 American industry associations have written to US President Barack Obama seeking action against India’s go-local policy.

In a joint letter early this month, industry associations including the US Chamber of Commerce and the US Council for International Business have said the Government of India was discriminating against a wide range of US exports jeopardising domestic jobs and putting at risk bilateral trading worth more than $60 billion.

“Over the last year, the courts and policymakers in India have engaged in a persistent pattern of discrimination designed to benefit India’s business community at the expense of American jobs,” the letter stated.

While the immediate trigger for the move is the Indian Government’s policy to give preferential market access to electronic and telecom products made in the country, the American business associations are also worried about recent court orders revoking patents on pharmaceutical products.

Against norms

“Such actions are completely at odds with recognised global norms and raise troubling questions about India’s compliance with its international obligations to protect ideas, brands and inventions and to treat imported goods no less favourably than domestic products,” the US industry lobby groups said.

Telecom and IT hardware suppliers such as Cisco and Hewlett Packard will have to set up a full-fledged manufacturing facility in India if they want to get Government contracts. The Ministry of IT and Communications has notified the guidelines under which 30 per cent of all equipment supply contract will be reserved for companies with manufacturing base in the country.

In the pharmaceutical space, Pfizer’s cancer drug Sutent and Merck & Co’s asthma treatment aerosol suspension formulation lost their patented status in India last year.

“Forcing local production and seeking to profit and create jobs through the rejection of basic property rights undermines India’s ability to achieve long term foreign investment,” the letter said urging Obama to initiate bilateral engagement with India to address the concerns.

(This article was published on June 18, 2013)
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