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US firm Corning joins business in India

Going to India was a tough call, and one that took a long time making past Corning’s boardroom.

business Updated: Mar 28, 2014 19:07 IST
Yashwant Raj

Going to India was a tough call, and one that took a long time making past Corning’s boardroom. They had heard harrowing stories about infrastructure, bad patent laws.

When the company finally signed off, it took them just a year to build its first plant from the first strike of a spade. And another six months to go commercially viable: July 2013.

Corning, a $28 billion world leader in speciality glass, has joined a small but growing band of US companies pushing back against the recent demonization of India’s business climate.

For a company that values innovation — it made the glass envelope for Edison’s light bulb and Gorilla Glass used in smartphones — it has had no issues yet.

“For Corning, patents and their protection are critically important,” said Deb Waggoner, director for the company’s global government affairs, “we don’t go into any market without that protection.”

India’s patent laws have been under continued attack in the US from some companies and trade bodies in the last some months, making it the top irritant in bilateral ties.

The powerful US chamber of commerce, for instance, has asked the US Trade Representative to designate India the worst violator of this country’s patent laws and practices.

Other issues of concern cited by the chamber and some trade bodies include India’s statutory preference for locally produced goods and multiple, and confusing, tax regimes.

Commerce minister Anand Sharma recently dared the US to go to WTO if it felt so aggrieved, saying India was in full compliance with international norms on patents.

Washington DC has yet to react. But USTR’s annual report due out next month on patent law violations impacting US firms worldwide may well be its response.

Companies such as Corning, drug maker Gilead, auto giant Ford, IT major IBM and Boeing have come to India’s defense, while not condoning its obvious failings.

Gilead believes India needs to do more on patent protection. It should be the next prime minister’s top priority, said company’s boss for emerging markets Clifford Samuels.

The drug maker, which has adopted tiered-pricing to make its products affordable in emerging and poor economies, is not among the pharmas lobbying against India.

Neither is Ford, which employs 8,000 people in India, worried enough to re-consider its investments as some US manufacturers claiming they are frustrated by Indian policies.

“Protection of intellectual property rights is the foundation of free market,” said a Ford VP, Steve Biegun, “but our experience in India has not been negative.”

But being in India’s corner doesn’t blind them to its obvious failings. They have insisted, for instance, the government needs to fix the infrastructure problem urgently.

“It’s the key,” said Waggoner. Corning’s plant is in one of Maharashtra’s least developed regions. The company did everything from scratch.

Two, most of these companies said, India needs to streamline the permission process for setting up a business. It ranked 134th in World Bank’s Doing Business 2014 report.