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India discriminates against foreign businesses: US Congressman

July 18, 2013 17:20 IST

India has been pursuing policies and measures that discriminate against overseas businesses, says US Congressman Erik Paulsen, below, left, who has written a letter to US President Barack Obama urging him to act against alleged intellectual property rights violations by India.

The letter, which has the backing of 170 Congressmen, also claims that India has taken a number of actions to favour Indian-based companies over US exporters.

Our hope is that these differences with India will be resolved through talks and discussions, Paulsen tells's Faisal Kidwai in an interview.

In a letter addressed to President  Obama, you have said that India is harming US businesses by favouring Indian companies over American ones. Could you tell us a bit about how Indian policies are hurting US companies?

The Indian government has been using a variety of mechanisms to force local production of everything from information technology and clean energy to medicines and medical devices. India has required solar energy developers to use solar modules and cells manufactured in India, mandated that as much as 100 per cent of certain computers and electronics sold in the country must be produced domestically, denied or revoked patents for innovative medicines, and imposed other discriminatory barriers to imports and investment in India.

Isn't it true that all countries, including America, have policies that give undue advantage to domestic producers?

The US economy relies on free market, pro-competition policies which foster investment and innovation, and our partners -- including India -- regularly have access to the opportunities this provides. Unfortunately, India has been pursuing policies and measures that discriminate against overseas businesses.

Critics of big pharmaceutical companies say that by issuing compulsory licences and other such moves, what the Indian government and courts are doing is bringing down prices of medicines and making them accessible to poor. Do you agree with this argument?

I do not agree. Prior to 2005, India did not even grant product patents for pharmaceuticals. If there are no incentives for innovation, there will not be new medicines to access. Addressing access challenges takes the efforts of all stakeholders to ensure a robust health care infrastructure is in place.

The critics also say that major drug companies earn billions of dollars in profits, have global monopoly and their contribution to innovation is debatable. Given these claims, how do you justify the current IP laws and expensive medical costs?

HIV was a death sentence years ago. Now in many cases it's a manageable disease. New drugs to treat chronic myeloid leukemia have emerged in recent years. I don’t think many patients doubt the value of those innovations. For every drug which makes it to the market, there are tens of thousands of compounds which don't. Of the few that do, only one out of five will recoup the average cost of developing an innovative medicine. To focus on the profits of the few successful drugs ignores the cost of the thousands of failures and the investment in research and development behind the success.

How hopeful are you that India will cede to requests laid out in your letter to Obama and what happens if it doesn't?

India and the United States have many shared values, from our steadfast belief in democracy to our promotion of human rights. There are oftentimes differences among friends and our hope and expectation is that these disputes will be resolved through continued discussion and dialogue.

Main image: A pharmacy in New York.

Faisal Kidwai in Mumbai