Geographical Indications have the potential to be India’s growth engine

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Published: April 11, 2016 6:10:52 AM

The recent overall slowdown in India’s exports possibly calls for a re-examination of policies essential to propel India’s foreign trade.

The recent overall slowdown in India’s exports possibly calls for a re-examination of policies essential to propel India’s foreign trade. One such policy is the recognition of geographical indications (GIs). What is currently in debate is the ‘unequal provision or treatment’ meted out to developing countries; as a result, they are unable to capitalise their true potential.

GIs are a type of industrial property that identifies a good as originating from a particular place, where a given quality, reputation or other characteristics of the good are essentially attributable to its geographical origin. Much like trademarks, the economic rationale of GI is based on the ‘information asymmetry’ between buyers and sellers in the market and the role of reputation, conveyed through distinctive signs, in tackling such asymmetry. Thus, GI acts as a signalling device helping the producers to differentiate their products from competing products in the market and enabling them to build a reputation and goodwill around their products, which often fetch a premium price. For instance, champagne originated from a place in France and has been recognised as a product whose reputation for quality or authenticity is intimately linked to its geographical origin. The product has not only emerged a major product in its export basket but also helps in promotion of tourism and cultural heritage.

Such examples are aplenty in India such as Kanjeevaram silk sarees, Pochampally Ikat. They can very well contribute to exports and popularity. What needs to be re-emphasised and negotiated is to provide such protection and equal treatment to developing countries like India whereby they can contribute to its foreign exchange as well as protect its exclusiveness, heritage and traditional skills of making such products.

The issue has gathered momentum with the recognition of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) on GIs as a form of IPR. This adequately enhanced the marketability of these products, and demonstrated that GIs have great potential to play a major role in trade between countries. This further increased the commercial significance of GIs which were not aware to many developing countries like India. It is at the same time not to say that GIs were insignificant in trade earlier. Quite to the contrary, the immense revenue potential of GIs necessitated their cross-border protection and thus these were included in the ambit of the TRIPS Agreement.

The Article 22 of the Agreement, which forms the centrality of GI protection, provides for a general level of cross-border protection of GIs in the course of trade, which is extended to India and other developing countries. However, what distinguishes developed countries from India is a special provision. This provision was made under Article 23 of the TRIPS Agreement for protection of GIs in the form of wines and spirits. The major demandeurs of this kind of protection were the European countries with their very long tradition in making of wines and spirits. This special treatment to wines and spirits appears to be developed country-centric. Developing countries, including India, have raised this issue in the Doha Round and in the recent meetings at the WTO. They seek the same higher level of protection for all GIs as was given under Article 23 for wines and spirits.

Many handicraft products such as Kanjeevaram silk sarees, Pochampally Ikat, Chanderi fabrics, Madhubani paintings, Mysore jasmine, Bidri metalworks, Kotpad handloom, etc, have been registered as GIs in India. Many food products and agricultural products are also registered. In fact, six foreign products have also been registered as GIs in India. Over 170 Indian products have been recognised as GIs in India. Evidently, the potential is immense.

It needs to be reiterated that the benefits of the registration of a product as GI is actually realised only when these products are effectively marketed and protected against illegal copying. Effective marketing and protection requires quality assurance, brand creation, post-sale consumer feedback and support, prosecuting unauthorised copiers, etc. Thus, the registration is only the first step in the creation of a market for the GI. Further, this protection first gains significance in the domestic context before international protection becomes relevant. However, for internationally recognised products like Darjeeling tea, which has an expansive export market, international protection is of crucial importance.

There is a direct link between the cultural diversity that exists in India with its varied peoples, traditions and flavours on the one hand, and the legal protection as GIs that the products of cultural activity can have, on the other. There is also a link to local communities, in towns and villages, which possess traditional knowledge of making these products, which in themselves, many a time, are part of their traditional cultural expressions. Thus, legal protection to GIs also extends to protection of traditional knowledge and traditional cultural expression contained in the products. In doing so, not only are livelihoods protected but also possibilities of employment generation are encouraged. In fact, owing to the premium prices that many GIs command today, there is a possibility of preserving many traditional skills.

Since many of Indian GI products relate to textile and tea—which are largely exported to EU countries—there is a merit in negotiating to implement equal treatment for Indian GI products. After all, EU is still India’s largest trading partner. GIs have the potential to be our growth engine. Policy-makers must pay a heed to this and negotiate harder to give Indian GI products their true reward.

The author is professor, Lal Bahadur Shastri Institute of Management, New Delhi, and former senior faculty, IIFT

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