Indian Government Announces Desperately Needed Intellectual Property Reform

Lorenzo Montanari Executive Director, Property Rights Alliance
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The Indian government has announced a plan to implement new policies that would strengthen weak intellectual property (IP) laws. The news is a major breakthrough for IP rights ahead of Prime Minister Narendra Modi’s visit to the White House on Monday.

Commerce and Industry Minister Nirmala Sitharaman announced the government intends to have an IP policy in place within six months, with a discussion paper to be released within two months. Although specific policy details remain vague, government officials are committed to improving India’s global reputation and have confirmed that they will expand the size of the Patent Office in an attempt to clear the backlog of applications and improve IP efficiency and enforcement.

“India needs to aggressively tell the world that we believe in intellectual property rights,” said Amitabh Kant, a spokesman for the Commerce and Industry ministry, in a statement following the announcement. “We need a well-established framework for IPR and we’ll open it for public debate and discussion.”

While Prime Minister Modi has been hinting at implementing an IP friendly policy since his election in late May, the announcement represents a major shift for India, which has developed a reputation for a trade policy characterized by fiercely protectionist policies and frail IP rights that encouraged counterfeiting.

The announcement of IP reform is great news on multiple fronts.

It will be welcomed by business leaders, who have become increasingly dismayed at Delhi’s complicity in allowing Indian companies to violate IP rights, including the refusal to pass legislation to counter film piracy and the revoking of patents for drugs manufactured by major pharmaceutical companies. However, India has taken several steps to repairing the fragile relationship with foreign investors and has agreed to meet with American pharmaceutical leaders to discuss how to better facilitate trade and investment.

The proposal has also led to renewed optimism over the future of U.S.-India relations ahead of Prime Minister Modi’s state visit. Earlier this year relations had deteriorated to the point that the U.S. Trade Representative was forced to place India on the Priority Watch List due to numerous IP violations and extensive concerns from U.S. firms.

Finally, Delhi’s plan is great news for India’s developing economy because of the important role IP has in encouraging growth and innovation. According to the annual International Property Rights Index, there is a strong link between property rights systems and key economic indicators including household income, GDP and foreign investment.

The announcement of imminent IP reform is a strong sign that India is becoming serious about attracting foreign investment and improving its global competitiveness. While there is substantial work ahead to implement IP reform, Prime Minister Modi’s government has taken a good first step that will help create a strong business environment and restore India’s business reputation. 

Lorenzo Montanari is Executive Director of the Property Rights Alliance (Americans for Tax Reform affiliated).