With Prime Minister Nerendra Modi visiting the United States this week, it’s worthwhile to take a look at how much has changed in the US-India bilateral relationship over the last year.

In the past twelve months, the U.S. and Indian governments have taken a series of steps to reinvigorate bilateral dialogue mechanisms with the hopes of increasing the bilateral trading relationship.  The Indian Government is in the process of finalizing its first, comprehensive National Intellectual Property Policy, a policy which should underscore the importance of IP to the continued economic growth and global competitiveness of the Indian economy. The business community in both countries is eagerly awaiting the release of the new National IP Policy which could catalyze increased investment and innovation in India and India’s overall competitiveness in the global marketplace.  The meeting of the U.S.-India Trade Policy Forum in November 2014 was another significant step as this dialogue plays a critical role in fostering greater trade and investment between the two countries.  The resurrected TPF is scheduled to meet again in October 2015and offers renewed hope that longstanding trade and intellectual property (IP) issues will be resolved. 

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As Modi continues to promote the ‘Make in India’ campaign, it should come as no surprise that the Modi administration has increasingly focused on the role innovation will play to generate greater investment and home-grown ingenuity in India.

Industry welcomed the news that discussions around fostering innovation in India will be a substantive portion of the prime minister’s agenda while he is in the U.S.  This comes after the Indian Ministry of Commerce and Industry’s recognition that introducing new IP initiatives will be critical to the success of the Make in India campaign. Yet, as the Modi administration seeks to foster greater innovation and entrepreneurship in India, the role robust IP protections must play cannot be ignored.

The benefits of robust IP are both far-reaching and well-documented. A strong IP system, working in tandem with a transparent regulatory framework, provides investors with the legal certainty that companies seek when considering entering into new markets. A recent report by the independent research firm, Pugatch Consilium, demonstrated the integral link between IP protections and investor confidence. The survey revealed that key gaps in India’s IP system – particularly in the biopharmaceutical space – have created a high-level of uncertainty, which limits pharmaceutical investment and, in turn, the scope of innovative activity which can take place in the market. With an estimated $200 billion invested in life sciences research and development annually, stronger IP protections will ensure that India becomes a viable and competitive market to attract a share of that investment.

Not only will robust IP help attract investment – one of the key goals of the ‘Make in India’ campaign – it will also catalyze greater domestic innovation. All innovators, from researchers at global corporations to creative minds seeking to grow a start-up company, need assurances that their efforts will be adequately protected. Intellectual property laws provide that certainty. Data from the Global Intellectual Property Center’s (GIPC) International IP Index “UP: Unlimited Potential” reveals the direct correlation between IP protection and the growth of innovation. The Index found that economies with state-of-the-art IP environments provide 50 percent more innovative outputs than those economies whose IP systems lag behind. As India strives to become one of the world’s leading economic powerhouses, creating an environment with the potential to double India’s innovative capacity will do much to help achieve this objective.

The ultimate goal – both for India and for all nations striving to foster economic growth and global competitiveness – is to put in place policies which lay the groundwork for the creation of a true knowledge-based economy.  For that to happen, the government must create guidelines which provide greater legal certainty for private sector investors, create a viable technology transfer mechanism, and foster greater enforcement of legislation aimed at protecting IP-intensive industries in India. Each of these factors, in turn, will support the creation of a robust innovation ecosystem, one from which India surely has the most to gain.

Elliot is the executive vice president of the U.S. Chamber of Commerce’s Global Intellectual Property Center.