* India is largest beneficiary in U.S. trade benefit program
* U.S. Congress has already begun look at Indian practices
By Doug Palmer
WASHINGTON, May 14 A U.S. think tank on Tuesday
recommended Congress suspend trade benefits for India, in the
latest sign of U.S. frustration over Indian policies that block
American exports and "free ride" on costly U.S. research to
develop new medicines and other forms of valuable intellectual
"The United States should not sit idly by as the Indian
government enacts regulations that harm American industry and
jobs," Stephen Ezell, senior analyst at the Information
Technology & Innovation Foundation (ITIF), said in a paper.
Congress should start to remove India from the U.S.
Generalized System of Preferences (GSP) program, which waives
duties on most goods from developing countries, and direct the
U.S. International Trade Commission to investigate "how India's
mercantilist policies damage the U.S. economy," he said.
India was the top recipient of GSP benefits in 2012, with
some $4.5 billion in imports from that country entering the
United States duty-free. The entire GSP program expires at the
end of July, creating an opportunity for lawmakers to tinker
with the program as they work on its renewal.
The U.S. House of Representatives' Ways and Means Committee
recently held a hearing where it heard a slew of complaints
about India's industrial policies.
India is the United States' 13th largest trading partner,
with two-way trade totaling $62.9 billion last year.
But that is not as large as it should be "because of
entrenched trade barriers and other unfair practices" that make
it difficult for U.S. companies to compete in the subcontinent,
said Ed Gerwin, a senior fellow at Third Way, a policy think
tank, during a panel discussion on the ITIF paper.
The ITIF paper listed several actions taken by the Indian
government that it said were aimed at "stripping" foreign
biopharmaceutical companies of valuable patent protections.
In essence, Indian government policy allows its generic drug
manufacturers to "free ride" on the research and development
costs of foreign drug manufacturers, former U.S. Trade
Representative Charlene Barshefsky said.
In just two of several high-profile cases, India issued a
license to allow generic production of Nexavar, a cancer therapy
drug researched and developed by Bayer in the United
States, and denied Novartis' patent application for
the cancer drug Glivec, even though nearly 40 other countries
approved it, the ITIF paper said.
In the electronics sector, the Indian Ministry of
Communications and Information Technology has imposed local
content requirements for government and private sector purchases
that have "security implications for the country," potentially
blocking foreign equipment manufacturers from a huge section of
the Indian market, the paper said.
India's record has made it "the current outlier when it
comes to intellectual property protection," said Mark Elliot,
executive vice president for the U.S. Chamber of Commerce's
Global Intellectual Property Center. "Indian law, when it comes
to protecting IP, is mostly lacking," he said.