India has embarked on a groundbreaking journey by finalizing a free trade agreement (FTA) with the European Free Trade Association (EFTA), a bloc comprising Switzerland, Norway, Iceland, and Liechtenstein. This Trade and Economic Partnership Agreement (TEPA) presents a novel structure that includes commitments on investment protection and promotion as well as intellectual property (IP) rights—areas that India traditionally managed as sovereign prerogatives during multilateral negotiations at the World Trade Organization (WTO).
In the global scene, India, alongside South Africa, rallied for a TRIPS (Trade-Related Aspects of Intellectual Property Rights) waiver pertinent to COVID-19 technological advancements. This appeal, aimed at empowering domestic innovation and independent research for COVID vaccine production, has seen India hailed as a champion of the developing world, especially given the EU and U.S. resistance against the TRIPS waiver at the WTO. However, domestically, the Indian government has extended significant IP concessions to the EFTA, reflecting a major shift in policy.
The IP concessions in question are not standalone occurrences. India appears set to yield further ground in its IP policy in ongoing negotiations with powers like the EU and the U.K. This shift has been gradually taking shape, evidenced by the Economic Advisory Council to the Prime Minister of India (EAC-PM) working paper from August 2022, which openly employs the U.S.-advocated patent policy framework as a benchmark for accelerating patent grants in India.
Critiques highlight this new approach’s apparent neglect of India’s innovation barriers. The suggestions lean heavily in favor of private interests, and the paper’s portrayal of the patent controller’s office as a profit center disregards the broader public interest. It operates under the premise that luring foreign direct investment (FDI) relies on IP concessions, a trend in the growing technological standoff between the U.S. and China. This particular discussion, backed by selective comparison of patent filing numbers among China, the U.S., and India, conspicuously omits the pivotal role state-sponsored innovation and diffusion investments have played in the technological ascendancy of nations like China, Japan, South Korea, and the U.S.
The fruits of China’s indigenous innovation policies and the knowledge spillovers extracted from FDI stand in stark contrast to India’s current trajectory. The lack of coordinated investments in science, technology, and innovation (STI) with the cultivation of IP markets has left India trailing significantly behind China in the realm of independent innovations. China’s ambitious goal of self-sufficiency in technological innovation was realized through substantial state investment in STI, absent in India’s strategy.
Further reflecting this new policy direction, the 2024 patent rules have assimilated the IP concessions granted to EFTA. The EAC-PM favored streamlined patent application timelines and the removal of onerous reporting requirements for foreign patent filers. It even supports weakening pre-grant opposition provisions, which many argue exist to defend the public interest—is in stark contrast with the post-WTO patent amendments.
Alarmingly, statistics reveal 76% of patents filed in India post-TRIPS were by foreign firms, and a significant portion of tech patents involving Indian inventors are filed by foreign R&D centers. India lags behind in R&D employment in its business sector, with a notable chunk of Indian R&D talent employed by American firms establishing their centers in cities like Bangalore and Hyderabad. Consequently, the nation’s expenditure on technology import has dramatically dwarfed domestic innovation investments, a trend amplified by foreign corporations like Syngenta and Bayer bolstering market control through IP.
This shift towards an FTA framework driven by an IP maximalist agenda, mimicking that pushed by the United States Trade Representative, poses a serious threat. It risks undermining the delicate balance between public and private interests and could draw India away from foundational innovations, strictly embedding India’s STEM workforce within the innovation ecosystems of Silicon Valley instead of fostering indigenous progress.
In closing, India’s new trade architecture marks a pivotal departure from its traditional stance on IP and innovation strategies. As the country navigates its FTA undertakings, it is critical to evaluate whether the concessions made serve its long-term interests or merely concede to foreign pressures at the cost of nurturing its homegrown talent and capabilities.
