New Delhi, April 28: India is exploring the possibility of dragging the US to the World Trade Organisation (WTO) if Washington imposes sanctions for alleged patent violations in medicines.
The US Trade Representative on Wednesday will release a report on Special 301, which will include a list of priority foreign countries that deserve trade sanctions.
A Priority Foreign Country tag is the worst classification of a country, under US trade laws, for denying protection to the intellectual property rights of American companies.
A senior commerce ministry official said India would weigh the options and could drag the US to the WTO.
“Indian IPR laws are fully compliant with the WTO and other international norms. Any unilateral action taken by the US will violate that agreement and India will suitably respond by dragging the US to WTO’s dispute resolution mechanism,” officials said.
They said the Special 301, which authorised the American administration to target its trading partners for sanctions, amounted to a “unilateral” licence to “punish” others and went against the multilateral nature of the WTO and its rules.
The decision was taken after a review meeting by cabinet secretary Ajit Seth with officials from the trade and foreign ministries.
Trade tensions with the US are growing at a time the outgoing US Ambassador Nancy Powell has sought a dialogue within the first 100 days of the new government to ratchet up bilateral trade to $500 billion.
American drug companies have been lobbying the US administration to impose trade sanctions on India as it allowed the manufacture of generic life saving drugs in the country for poor patients.
India believes that the threat is unjustified as the category of Priority Foreign Country is reserved for very serious intellectual property law offenders, while the country’s legislation is in line with global specifications. Ukraine is the only country on the list at the moment.
“We will examine in detail the options available under the dispute settlement undertaking of the WTO in case it (India) does get categorised as a ‘priority foreign country’….Retaliatory action, too, could be considered,” the official added.
US-based pharma companies are also unhappy with the country’s decision in 2012 to grant a compulsory licence to an Indian company for the manufacture of a copied version of Bayer’s cancer medicine Nexavar. This move brought down the price of the drug by 90 per cent.
A committee is currently reviewing patented drugs made by multinational companies to see if in public interest some of them should be made as low-cost, generic versions.
These include drugs to treat life-threatening diseases that need extremely costly medication such as cancer, diabetes, hepatitis, and HIV, officials said.
However, trade officials point out that by making generics, Indian companies were not hurting the bottomlines of its US counterparts. US drug exports to India have risen by 500 per cent since 2000 compared with 250 per cent in the rest of the world.
Analysts said the Americans feared that India might invoke its compulsory licensing rule on about $92 billion worth of drugs that will go off-patent in the next three years. These drugs can then be produced very cheaply.