USTR’s Out of Cycle Review of IPR issues in India to end in two weeks

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Every third tablet consumed in the World is ‘Made in India’ - Indian Drugs Manufacturers' Association (IDMA)

  As planned earlier this year, the US Trade Representative (USTR) has started an Out-of-Cycle Review (OCR) of India for its 301 paper (Section 301 of the US Trade Act of 1974) which has India on a “Priority Watch List” on issues concerning protection of US Intellectual Property Rights (IPR) in India. The first 301 report, then called a “Fact Sheet,” was published in 1989 and had eight countries on the "Priority Watch List" and 17 on the "Watch List". Since then, countries such as Italy, South Korea and the Philippines have been removed from the lists, but India remains stuck, mainly due to online piracy and concerns of the US pharma industry over violations of US patents by drug manufacturing companies in India. USTR says that India is home to perhaps the highest rate of online video piracy in the world, which is estimated at around 50% of video piracy in the entire Asia-Pacific. USTR also claims that India is the largest source of counterfeit pharmaceuticals for USA, and that up to 40% of drugs sold in Indian markets are fake. India is not alone on the 301 Paper watch list. Countries such as Chile, China, Indonesia, Thailand, and Turkey have also consistently featured on the watch lists ever since 1989. As of 2014, 10 countries, including India, are on the Priority Watch List and 27 countries are on the Watch List. A downgrade to “Priority Foreign Country” will allow USA to impose unilateral trade sanctions on a country. However, USTR has said that it will not re-visit India’s designation on the 2014 Priority Watch List in the OCR. According to USTR, “The OCR aims to improve IP protection and enforcement in India and support India’s efforts to achieve a ‘decade of innovation’ and advance its legitimate public policy goals, including access to affordable medicines.” The deadline for the public to submit written comments is October 31, 2014, and it is November 7, 2014, for foreign governments. A USTR spokesperson told The Dollar Business, “We look forward to receiving comments from the public, and to working with the Special 301 Subcommittee agencies as well as with the Government of India to make our evaluation.” However, the OCR is unlikely to change anything for India due to two reasons. First, the Indian government has reiterated that the 301 Paper is of little importance for it. Recently, Nirmala Sitharaman, India’s Commerce Minister, had informed the Parliament, “The Special 301 process is a unilateral measure taken by the United States under their Trade Act, 1974 to create pressure on countries to increase Intellectual Property Rights (IPR) protection beyond the TRIPS Agreement. It is an extra territorial application of the domestic law of a country and is not tenable under the overall WTO regime.” And second, India hasn’t done anything significant in recent months (and probably years) to address IPR concerns of USA other than Prime Minister Narendra Modi’s visit to USA a few weeks ago.  

This article was published on October 22, 2014.