Investors Growing Concerned at Lack of Promised Indian IP Reform
Foreign investors are growing wary and impatient at the lack of tangible Intellectual Property reforms in India, according to a new report released by the National Bureau of Asian Research (NBA). As a result, India risks driving away firms entirely, or severely reducing the foreign investment that a firm is willing to devote to India.
For years, India has developed a reputation for poor IP protections, most notable in its policies that showed complete disregard for pharmaceutical patent protection, encouraged copycats and resulted in a shortage of new medical innovations reaching the market.
However, the election of pro-business politician Narendra Modi to Prime Minister last year led to renewed optimism that India would become a place where investors could safely do business. PM Modi quickly announced IP reform with the aim to improve efficiency and enforcement of intellectual property and attract more foreign investment.
Following an apparent commitment to strong IP on the part of India, including several high profile US-India meetings, the US made important concessions including pulling back on an Out-of-Cycle Review late last year. Unfortunately, India’s IP progress has since flat lined.
A US Trade Representative report on notorious markets released earlier this month found that India has not taken meaningful action against many of its markets that produce counterfeit goods. The US government is not the only source of frustration with India. Business & trade representatives from the EU and Japan have both flagged concerns that more needs to be done and have suggested that firms may soon look to invest elsewhere.
The report compiled by the NBA finds that India would be the biggest beneficiary from a strengthened IP regime, more than any prospective partners. In fact, as the report notes, the regions in India that have strong IP protections also have stronger GDP growth than those that do not. This should not be surprising – the 2014 International Property Rights Index demonstrates that countries with strong physical and intellectual property protections have a GDP per capita up to thirteen times greater compared to those that do not protect property rights.
Since Modi’s election as Prime Minister, New Delhi has taken steps in the right direction towards strong IP protection. However, India must follow through on its rhetoric and continue taking strides toward policy that respects innovation and creativity.