US raises concern on ‘restrictive’ policies of India

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New Delhi | Updated: November 26, 2014 12:57:18 AM

India's move to introduce patents-disabling compulsory licensing (CL) provision, akin to the one in the pharmaceutical sector...

India’s move to introduce patents-disabling compulsory licensing (CL) provision, akin to the one in the pharmaceutical sector, in the larger manufacturing sector, stringent localisation norms for defence, solar power and retail sectors and ‘high’ import tariffs on information, communication and technology products  could adversely impact US investments in the Make in India programme, the US warned on Tuesday.

Speaking to reporters after a meeting of India-US Trade Policy Forum on Tuesday, US trade representative Michael Froman said these issues were raised, adding: “Whatever the debate is around CL with regards to the pharma sector, taking that same argument to the manufacturing sector and suggesting CL will spur manufacturing, is something we have concerns about.”

On localisation norms, he said, “Stu-dies show that where (localisation norms) are used, you tend to end up with an industry that is less globally competitive, with higher costs for producers and consumers and lowering consumer welfare.”

The government invokes CL to allow a firm other than the patent holder to produce and market a patented product or process without the consent of the patent owner during public health emergencies/public non-commercial use. It is one of the flexibilities  in WTO’s TRIPS Agreement concerning IPRs. For CL in the pharma sector, the generic copy is produced mainly for the domestic market, not for export. This flexibility is used to ensure adequate supply of life saving medicines at affordable costs.

Froman said to ensure Indians have access to safe healthcare, it was important for the government to think beyond CL and ensure lower tariffs, as well as a good distribution system and affordable health insurance.

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