US Industry Urges Tangible Progress in Trade Relations with India
U.S. manufacturing and other industry representatives are still optimistically eyeing trade and investment improvement in India under the new Narendra Modi government, despite some disheartening developments in recent months, such as the Indian veto of the World Trade Organization (WTO) facilitation agreement, those industry advocates said on Oct. 3 at the National Foreign Trade Council (NFTC). U.S. industry is “waiting to see” if Prime Minister Modi will make good on his promise to open up and add transparency to the Indian economy, however, the representatives said. Modi and President Barack Obama pledged to improve relations in a number of trade areas, following meetings on Sept. 29-30 (see 14100101). Modi took office in May.
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U.S. trade and investment with the country is hampered by a manufacturing policy there that restricts foreign operations through requiring local content inputs, raising tariffs on textiles and auto, compulsory licenses for pharmaceutical patents and other barriers, said Chris Moore, senior director with the National Association of Manufacturers. “We have yet to see the kind of concrete progress and real results that we’re looking for to really demonstrate to industry that India is open for business,” Moore said. India is the least connected to global value chains among the world’s largest economies, he added.
Obama and Modi vowed to work together in the coming months to strengthen the Indian intellectual property regime. U.S. pharmaceutical industry representatives criticize Indian compulsory license rules, which basically remove exclusivity patent rights for patent holders. The U.S. is targeting a change in or removal of those laws as part of a new IP regime, set to be rolled out over the next six months, according to Indian officials, including Modi. “There really ought to be a commitment to refute compulsory licensing as a commercial tool and a commitment to resort to compulsory licenses, which is really a desperate measure, only in the case of a genuine health emergency, said Patrick Kilbride, IP director at the Global Intellectual Property Center of the U.S. Chamber of Commerce. “India has lacked an overarching intellectual property policy.”
Meanwhile, the Indian government is not giving any more indications of what it wants in return for its support of the WTO Trade Facilitation Agreement, said Moore and NFTC President Bill Reinsch. India is still holding up implementation of the agreement, after torpedoing the first implementation step in late July (see 14092501). The Obama-Modi summits have “not yet made any difference" and "things are as bad as they have been,” said Reinsch. “Other delegations have been disconcerted because, when they ask the Indians to be more specific about what they want … their response, as late as I think today, has been ‘we want to block [implementation].’” -- Brian Dabbs