The status could lead to imposition of trade sanctions in India. However, pressure notwithstanding, India has refused to enter into any kind of talks with the United States, calling its actions unilateral and outside the framework of WTO.
While the federal quasi-judicial agency, US International Trade Commission (USITC), is conducting a fact-finding probe into Indias trade and investment policies, US Trade Representative (USTR) is investigating its IP regime on the allegations made by US industry lobbies.
The USITC has already heard American lobby groups and Indian industry representatives on the issue. India, on its part, has refused to entertain the USITC officials who wanted to meet senior functionaries of more than 14 departments and question them regarding the probe.
The ministry of external affairs has replied to the US embassy email saying that the meeting would not be possible due to the impending elections and closing of fiscal year.
The USITC reports form the basis of US trade policy.
Stepping up the pressure on India, National Association of Manufacturers (NAM), which represents about 50 US business groups, in a letter, has told the USTR that this designation (PFC) appropriately would rank India among the very worst violators of intellectual property rights and establish a process leading to concrete solutions.
Representatives of several influential trade bodies appeared before an inter-governmental panel led by the USTR on Monday making a case against India's trade practices.
Under the US Trade Act, a Priority Foreign Country is the worst classification given to foreign countries that deny adequate and effective protection of IPR or fair and equitable market access to US persons relying upon IPR protection. Trade experts have warned that such a designation would lead to further deterioration of relationship between the two countries.