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US concerned over India's economic policies

A top White House official joined the chorus of American lawmakers and US businessmen who have expressed concern over India's alleged "restrictive" and "protectionist" trade and investment policies.

world Updated: Jun 07, 2013 12:58 IST

A top White House official joined the chorus of American lawmakers and US businessmen who have expressed concern over India's alleged "restrictive" and "protectionist" trade and investment policies.

"We're very concerned about the innovation and the investment environment in India at the moment," Mike Froman, the national deputy security advisor on economic policies to President Barack Obama, told lawmakers on Thursday.

During his confirmation hearing for the position of US Trade Representatives, Froman listed out compulsory licensing, patent issues, preferential market access, localisation as some of the issues of concerns as a number of influential Senators alleged that the recent Indian policies have been detrimental to the India-US ties in particular the business sector.

"We have a lot of concerns about what's going on today in India especially their emerging market access barriers, protectionist measures," said senator Rob Portman.

"One is the lack of respect for patents. Basic intellectual property protections are being set aside. They've invalidated and broken American drug patents, as I say. These actions are in disregard of WTO rules; They they're fundamentally disruptive to innovation. I think, frankly, it's a major concern, because it could spread," he said.

The White House believes that it is in interest of both India and the US to expand their trade and business ties.

"We believe that it is in both the United States and India's interests to continue to expand our trade and business relationship," Laura Lucas, spokesperson of National Security Council, told PTI.

Noting that India is one of the largest recipients of benefits under the generalised system of preferences (GSP), senator Orrin Hatch alleged that India is increasingly shutting down US companies out of its markets through a variety of measures, including restricting its imports of products to force companies to manufacture in India.

He alleged that India is forcing companies to give their intellectual property to Indian firms to increase local employment, and of course engaging in preferential market access policies that give preferences to domestic companies over US companies in the information and communications technology space.

"With regard to India specifically, I think there are a number of concerning developments regarding their innovation and investment environment, and you mentioned a number of them, including patents," Froman said.

"I'm very concerned with the deterioration in the environment for protection of US intellectual property rights and innovation in India. The government of India continues to take actions that make it very difficult for US innovative pharmaceutical companies to secure and enforce their patents in India," he said.