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Post G20 – India Seems Open for Business

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This week’s meeting of the G20 highlighted the need for concerted global efforts to stimulate economic growth. Although the communiqué was light on detail, it highlighted the recent role of India in finally enabling work on the Doha Development Agenda to move ahead. This comes after India was heavily criticised, including by other developing countries, for blocking the negotiations of the WTO Trade Facilitation Agreement, and creating a yet another WTO stalemate. Could we hope that India will gradually become more engaged on trade as a driver of growth? Since the Modi Government came to office, signals have been mixed. If India did engage, it would give an important impetus to growth, not just in terms of market opening but as a political signal from a country that has often seemed skeptical about the benefits of open trade.

For the EU, struggling to find its own path to growth, decisions made in India matter, but it would be wrong to suggest that these are simple choices. Take the example of Intellectual Property in the pharmaceutical area. India has been an outlier in IP policy in international terms, both in terms of its law and its interpretation of the international rules. It has also faced backlogs in dealing with patent applications which have necessitated the recruitment of more examiners. Neither is it clear that the payback from changes in policy would be immediate. Although India has great scientific, technological and creative capabilities, the immediate beneficiaries of an improved IP system would be mainly foreign companies. There is still significant untapped potential in realizing all benefits from innovation. Add to that, the existing industry policy rhetoric in India  is about being a low-cost supplier of generic products – medicines that are mostly exported to other countries. As a recent EU Communication noted, IP is not an easy sell.

Nevertheless things are moving. The Government has just announced the appointment of a “Think Tank” to review national IP policy. While the initiative is welcome, some have questioned whether it has enough experience from outside India to really deliver on its brief and benefit from international best practices elsewhere. India is also reviewing its patent examination guidelines. In the industry’s view, the guidelines remain too heavily-weighted towards grounds for refusal of a patent, but it is appreciated that there has been wide consultation on the drafts.

Perhaps India will decide what India is going to do, but at the same time, both the US and EU have signaled their concern at the lack of progress. Openness to the international scene and forward-looking engagement at multilateral and bilateral dialogues can bring more choices for policy-makers.  The US and India have agreed to open a dialogue on IP, while the existing EU-India dialogue remains moribund, along with the Free Trade Agreement. Improving conditions for innovation is a bet on the future for any country, but for India, it must be a fairly safe bet to go for innovation also in the higher margin area of new and innovative medicines. And that does require IP.

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EFPIA IP & Global Health Director

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