President Obama’s India visit offers an opportunity for India and the United States to address longstanding IPR issues affecting their bilateral relationship.

India's intellectual property rights (IPR) regime, particularly the patent law, is an area of concern straining the bilateral relationship with the United States for the last several years. Ahead of President Obama's visit for India's Republic Day celebrations, both India and the U.S. have taken proactive steps to resolve differences related to IPR and institutionalize high-level engagement on IPR issues. India is also pursuing a specific work program and deepening cooperation and information exchange with the U.S. on IP-related issues under the U.S.-India Trade Policy Forum (TPF).

The TPF, the primary platform to discuss and resolve bilateral trade and investment-related issues, met in New Delhi in November 2014, and the U.S. reportedly asked India to improve its IPR standards. Though there were no major breakthroughs at the TPF, both sides committed to intensifying trade discussions. A work schedule was created to follow up on talks that focused on agriculture, services, manufacturing and IPR. While India has been negotiating IPR as part of trade agreements with other countries and blocs such as the European Union, direct technical-level discussions centered on the IPR policy are only being held with the U.S.

In accordance with the work plan on IPR both countries will hold talks on IPR in the week before President Obama’s visit to India. This will be the first of six rounds of technical-level discussions by experts from different ministries and agencies that the U.S. and India will complete by October 2015, according to media reports quoting a top official at the Department of Industrial Policy and Promotion (DIPP). 

The meetings will broadly cover copyright, trademarks, patents, traditional medicine and access to health care. While discussing IPR-related issues, Minister Sitharaman emphasized the progress made by a government-appointed IPR think-tank on a new IPR policy for India. The United States agreed to share information on this subject in order to support India’s on-going reform efforts.

Draft IPR Policy

Earlier this year, the Indian government’s Department of Industrial Policy and Promotion constituted a think tank to draft a national IPR policy and advise the government on a range of patent-related issues. The think tank has submitted its first report, which lists six objectives and includes awareness and promotion of patents, creation of IPR, legal and legislative frameworks and commercialization of patents as key themes. 

U.S. Confidence-Building Measures 

The office of the United States Trade Representative (USTR) includes India on a list of countries the U.S. government determined present the "most significant concerns" regarding weak IPR laws. Last year, USTR decided to conduct an out-of-cycle review (OCR) of India's IPR system for the first time ever. The OCR report of India's IPR regime that came out last month (the 2014 Special 301 Report), concluded that India has made some positive commitments in recent months and lauded India's efforts in ensuring a “sustained, meaningful, and effective” dialogue on IPR. 

U.S. authorities have said that they are satisfied with some of the initial steps that India took to improve its IPR laws. D G Shah, secretary general of the Indian Pharmaceutical Alliance, noted that, although India has been on the Special 301 List since 1989, when the report was launched, the recently-released report was the first time the U.S. had expressed appreciation for the work done by any Indian government on IPR.

Potential Roadblock

A decision by the U.S. Congress in October 2014 to investigate the sharp price hikes of certain generic drugs by fourteen companies (including three from India), has cast a shadow on trade talks between the two nations. There are several reports suggesting that the pricing power of Indian drug companies has been restricted in the U.S. market, where these firms tend to earn more than half their revenue.

The Road Ahead

The final contours of India's IPR policy will have a significant bearing on the international IPR regime. India is the world's largest supplier of low-cost generic drugs and it continues to present a model to certain developing countries. The Indian government has invited comments from stakeholders on the draft report before January 30 to enable it to come out with a new IPR policy.

A clearer picture on India's IPR regime will emerge by the end of the year. Four major developments will help determine the course of India's IPR regime: Indo-U.S. talks starting later this month to iron out IPR-related differences; India's new IPR policy; the Special 301 Report that is due in April; and the U.S. International Trade Commission's (USITC) report, due in September, on trade and investment barriers in India. India-U.S. ties have visibly improved under Prime Minister Modi. The U.S.-India vision document, 'Chalein Saath Saath: Forward Together We Go,' is one indication of closer ties. Both sides are hopeful that improvements resulting from the intensified bilateral dialogue will result in a mutually beneficial solution to the IPR problem.