India needs to modify Intellectual Property Rights Rules to Attract FDI

A recent report suggest that India will have to do modifications in its intellectual property rights regulations as well as speed up the legal system if it wants to draw more foreign investment. It is also suggested that utilization of compulsory licensing should rather be a exception than a norm for vital pharmaceutical drugs.


Joint Report by EU Business Group

European Business Group, Europe India Chamber of Commerce and European Business and Technology Centre created this report jointly. Similar to Europe, concerns have also been raised by US industrialists over intellectual property rights especially in sectors such as pharmaceuticals. However, Indian government has categorically mentioned that intellectual property rights laws of the country comply with rules as well as norms of World Trade Organization.


Removing Barriers to FDI

The report also praises India for taking quite a few steps in the last 2 years for removing barriers in foreign direct investment in different sectors but also mentions that these measures need to be implemented quickly. The report also suggests that issues like revenue sharing or land acquisition should be discussed between center and the state and then only any policy decision should be taken. Additionally, reforms are also necessary in areas such as export promotions and trade facilitation.

It has also been seen that current market scenario in the country is not the same as many of the European Union companies understand and the government needs to look into it to improve the situation. The research head of EICC has suggested that companies interested in investing in the country should have patience as well as proper funding to cover up uncertainties in cash flows. The companies also need to think long term and do not focus on just short term goals.


Foreign Investments in India

It is worth nothing here that in last ten years EU firms have spent nearly $198 billion while in comparison the US and Japan invested $50 billion and $138 billion during the same period. This makes EU firms the largest investor group in India. In addition to it, European companies have invested in 2,556 new projects worth $118 billion as well as purchased interest in Indian 1,442 firms to the tune of $80 billion.

There have been many reasons for such achieved by European firm in India, some of them being landmark acquisitions, maintaining investments even during uncertain economic conditions and investment in new projects that hold great prospect.

To summarize we can say that EU firms have been more successful in India as compared to other countries. Investment by EU firms has also helped more than 1.5 million people in India to get employment, which has been beneficial for country’s growth as well.

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