Economy

India will not use compulsory licence as ‘Robin Hood tool’

Amiti Sen New Delhi | Updated on March 26, 2014

Rajeev Kher, Commerce Secretary

Rising trade tensions with US is a result of different approach to issues, says Rajeev Kher



India’s trade and economic policies are facing increased global scrutiny with the US attacking the country’s intellectual property regime and several countries questioning the procurement and pricing mechanisms for agricultural products. Commerce Secretary Rajeev Kher, in an interview with Business Line, explains why the international spot light is on India and how it is to be dealt with. Excerpts:

Recently, India has been facing flak at the World Trade Organisation for its policies related to pricing and exports of commodities such as wheat, rice and sugar. Why?

This is a reflection of how generally global trade is taking place. Countries are finding it hard to explore new markets and are trying to encash on any opportunity, real or perceived, that comes their way.

India has over the last few years become a significant player in agriculture. There are countries with relatively smaller export profile that have suddenly started perceiving everything as a threat. For example, Pakistan (that has raised concerns about India’s non-Basmati rice subsidies and exports) does not face a threat at all from India as it does not export non-Basmati rice. So this is all getting muddled in a discourse that is uninformed.

What about the concerns raised by WTO members on pricing of wheat exports?

India has done very well in wheat exports and has been getting good prices. Of course traditional exporting countries feel threatened. And because India has been at the forefront of the food security dialogue and the debate on stock holding that has been taking place (at the WTO), some countries may be looking at it as an opportunity to try and find faults with its policies. So the increased noise is a cumulative effect of all these factors.

Is India in a position to satisfactorily answer all the concerns raised?

The WTO’s Committee on Agriculture has been meeting. These issues have been raised there and we will answer them. We are confident that most of them can be answered well.

Isn’t the US demand that India notify its domestic subsidies at the WTO a valid one?

We have notified our domestic support only up to 2003. It is important for us to make those notifications. This is all work in progress. So far we were busy with issues like the Bali (Ministerial) debate. We are back on the job and will try to notify at the earliest.

What, according to you, is driving the escalation in tension between the US and India on trade related matters?

The two countries have relatively different approach on significant issues which is linked to their levels of economic development. For instance, on the issue of intellectual property rights (IPR), India wants to ensure that everything that happens in this country must try and serve the public good. The US approach is obviously different.

The other factor is that in the US, policy evolution is essentially part of lobbying in sectors. Some US companies have started seeing India as a country with a big market where certain policy developments can obstruct their access. They also fear that it could have a contagion effect on other markets. This is driving them to lobby hard with their Government.

Aren’t US pharmaceutical companies losing out because of relaxed IPR in India?

It will be wrong to say that actions that are being attributed to India such as compulsory licences (CLs) and Section 3 (d) will adversely affect their (US) trade. This is a perception that is being built by companies that fear that other countries are going to follow India’s policies. In reality, a number of American pharma companies over the last four-year period have increased their businesses significantly.

How do you see the two countries settling the issue?

Ultimately we have to talk and understand that each has compulsions. Nobody in India has said that we will use compulsory licence as a ‘Robin Hood tool’. In the last so many years, we have used it just once. The US must accommodate India’s interests. At the same time India has to ensure that the use of CLs is not arbitrary.

Published on March 26, 2014

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