US complains of risk to IP, ambiguity on taxes

Written by ENS Economic Bureau | New Delhi | Updated: Mar 7 2014, 09:56am hrs
The US government has criticised the lack of transparency in Indian tax policies, insistence on compulsory local manufacturing in more than one sector and little protection for intellectual property (IP) rights.

All the same, it is willing to resolve the differences through talks, Nisha Desai Biswal, US assistant secretary of state for south and central Asian affairs, said in a speech at the conclusion of her visit to meet Indian officials in New Delhi.

But she also made conciliatory statements, saying Like any trading partner, we do have our differences, and the willingness to talk about them indicates that we are in fact confident, mature partners... Were addressing these concerns head-on as good partners do either bilaterally in our long-established dialogues or multilaterally through the World Trade Organization.

Biswal's comments are part of the escalated differences between the two countries that had led to Indian companies such as Ranbaxy (fully) and Wockhardt (partially) being blocked out of the US, the world's largest market for generic drugs .

While India claimed the blocks were unfair, the US government had retorted that it will ensure all products entering its shore conform to its domestic standards.

Commenting on Biswal's speech, Abhijit Das, head of the Centre for WTO Studies at New Delhi, said The US is telling other countries not to follow the Indian precept in patent issues. Brazil and South Africa are, for instance, appreciative of the stance and this speech is an attempt by Washington to talk to them too.

Biswal's visit is part of the series of top-level US visits to New Delhi in recent months. US Food and Drugs Administration chief Margaret Hamburg visited India recently to meet commerce minister Anand Sharma and Drugs Controller General of India, GN Singh, among others. She also made it clear that the US will not accept any dilution of its drug manufacturing laws to address Indian concerns. The US plans to designate India as a priority foreign country in this regard in its 2014 Special 301 Report, which is due to be out on April 30.

The designation means India is clubbed with the worst offenders of intellectual property rights, facing trade sanctions on $4.5 billion of exports to the US. Already, the US International Trade Commission (USITC) and the US Trade Representative have threatened to take New Delhi to WTO on trade, investment policies (such as the one on energy) and on the IPR regime.

India replied saying its policies were compliant with the WTO norms, and refused any discussion on the matter.

But Biswal, an officer in the US department of state, said, We need to have very real conversations. There are a number of issues which need to be taken up. I understand that one compulsory licence has been issued by India (about which) there is a lot of anxiety. There are concerns about next generation drugs and whether they would be protected.

Further, pointing out that India fares poorly on the ease of doing business index of the World Bank, Biswal said India will have to remain committed to economic growth though theres no question Indias economic success is vital to achieving the strategic aims our leaders have laid out.