In late April, the United States Trade Representative—the agency responsible for recommending trade policy to the US president—released its annual report, called “Special 301.” The report analyses trade policies of countries across the world, especially their intellectual-property laws, and categorises them. India has been put on what the report calls a “priority watch list,” which includes countries judged by the USTR as having “serious intellectual property rights deficiencies” that require the agency’s increased attention. India has been put on the list for a record twenty-seventh time, and is accompanied by ten other countries, including Russia and China. The agency warns: “For such countries that fail to address U.S. concerns, USTR will take appropriate actions … pursuant to World Trade Organization or other trade agreement dispute settlement procedures, necessary to combat unfair trade practices and to ensure that trading partners follow through with their international commitments.”
The reason for India’s seemingly permanent position on the list is its patent system, which the agency deems too lax. According to the report, the main challenges in India for US companies are the country’s patent laws and “counterfeit” medicines. However, these patent laws also help keep prices of medicines low, which has allowed the Indian generic-drugs industry to flourish, ensuring greater access to medicines for not just India, but other developing countries as well. The USTR report is clearly giving voice to the US’s big pharmaceutical companies, which continuously complain about losing revenue in India due to the presence of the generic-drugs industry. Unfortunately, India has already succumbed to US pressure on this issue to a great degree, and further compromise is likely to be against the interests of the Indian masses.
The foundation of India’s patent law is the Patents Act, 1970. The act only allowed “process patents,” which meant that only the process of making a medicine, and not a compound itself, could be patented. This gave space to India’s local manufacturers to use alternative processes to develop medicines and sell them at lower rates. During the early 2000s, this law allowed India’s generic-medicines industry to produce low-cost AIDS medicines, which, many argue, prevented a worldwide catastrophe.