US concerned over India’s economic policies

Influential American lawmakers have joined the US businesses against India’s alleged “restrictive” and “protectionist” trade and investment policies, which a top White House official said is a matter of deep concern.

“We’re very concerned about the innovation and the investment environment in India at the moment,” Mike Froman, the National Deputy Security Advisor on economic policies to President Barack Obama, told lawmakers yesterday.

During his confirmation hearing for the position of US Trade Representatives, Froman listed out compulsory licensing, patent issues, preferential market access, localisation as some of the issues of concerns as a number of influential Senators alleged that the recent Indian policies have been detrimental to the India-US ties in particular the business sector.

“We have a lot of concerns about what’s going on today in India especially their emerging market access barriers, protectionist measures,” said Senator Rob Portman.

“One is the lack of respect for patents. Basic intellectual property protections are being set aside. They’ve invalidated and broken American drug patents, as I say. These actions are in disregard of WTO rules; They they’re fundamentally disruptive to innovation. I think, frankly, it’s a major concern, because it could spread,” he said.

The White House believes that it is in interest of both India and the US to expand their trade and business ties.

“We believe that it is in both the United States and India’s interests to continue to expand our trade and business relationship,” Laura Lucas, spokesperson of National Security Council, told PTI.

Noting that India is one of the largest recipients of benefits under the generalised system of preferences (GSP), Senator Orrin Hatch alleged that India is increasingly shutting down US companies out of its markets through a variety of measures, including restricting its imports of products to force companies to manufacture in India.

He alleged that India is forcing companies to give their intellectual property to Indian firms to increase local employment, and of course engaging in preferential market access policies that give preferences to domestic companies over US companies in the information and communications technology space.

“With regard to India specifically, I think there are a number of concerning developments regarding their innovation and investment environment, and you mentioned a number of them, including patents,” Froman said.

“I’m very concerned with the deterioration in the environment for protection of US intellectual property rights and innovation in India. The Government of India continues to take actions that make it very difficult for US innovative pharmaceutical companies to secure and enforce their patents in India,” he said.

“For example, I’m very disturbed by India’s recent decision to issue a compulsory license for an important medicine on entirely specious grounds. Also, counterfeiting and piracy continue to be rampant in India and the government’s IPR enforcement efforts remain weak,” Hatch said.

Senator Robert Menendez too piled on to the complaint against India. “I have been hearing from the pharmaceutical industry, I’ve been hearing from the high-tech industry, I’ve been hearing from other industries about how India’s inadequate protection, to put it mildly, and enforcement of intellectual property rights is a real challenge,” he said.

Earlier in the day, 16 top American business organisations wrote to President Obama, seeking his intervention on the alleged trade barriers from India.

“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... Administrative and court rulings have repeatedly ignored internationally recognized rights — imposing arbitrary marketing restrictions on medical devices and denying, breaking, or revoking patents for nearly a dozen lifesaving medications,” said the letter.

Alleging that India is discriminating against a wide range of US exports, jeopardising domestic jobs, and putting at risk a growing bilateral trading relationship with $60 billion last year, the letter said it is time that New Delhi end discrimination against US exporters and took steps to ensure it is not repeated in the future.

“To achieve this result, we urge the US Government immediately to initiate bilateral engagement at the highest levels and to co-ordinate closely with the European Union and other like-minded economies,” the letter said.

Signatories to the letter included the US Chamber of Commerce, National Association of Manufacturers, CropLife America, Telecommunication Industry Association, United States Council for International Business, Emergency Committee for American Trade, National Electrical Manufacturers Association, and American Foundry Association.

“Reversing discrimination and restoring trust would be a win win enabling domestic exporters to further invest in India’s future and helping India grow its economy and create opportunities for its people,” the letter said.

Less than a fortnight ago, Ajay Banga, Chairman of US India Business Council and president and CEO of MasterCard Worldwide, in a letter to Obama had urged him to push for the much needed economic reforms in India.

“We ask that you and your representatives lay before our Indian friends an agenda of key changes in Indian policy which, if undertaken, will go a long way towards improving the business climate and restoring confidence in the Indian economy,” he said.

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