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Problems related to Intellectual Property Rights Regime in India and its impact on Indian Economy

Problems related to Intellectual Property Rights Regime in India and its impact on Indian Economy

Recently, the Standing Departmental Committee on Commerce has presented its 161st report on ‘Review of Intellectual Property Rights Regime in India’.

The committee came to know from dialogue with various organizations that no specific study has been done by India so far to analyze the economic effects of ‘Intellectual Property Rights’ on GDP, development of industries, employment generation, trade, and commerce, etc.

The committee has recorded comments in its report comparing the Indian system with other foreign jurisdictions at several places. Under this report, the need for India to follow the policies of the US or the European Union has also been underlined.

In this context, it is very important to study the IPR system to understand the impact of the ‘Intellectual Property Rights’ ecosystem on the economy.

Need for the study of IPR

To know the contribution of ‘Intellectual Property Rights in the economy: Most of the countries study how much ‘Intellectual Property Rights’ contribute to their economy. In addition, different countries also study the harm it causes when non-flexible ‘intellectual property rights’ affect access to healthcare.

Excessive health care expenditure: IPR studies are particularly important in India, where health care expenditure continues to rise and the cost of some medicines is out of reach of the common man.

Important Contribution of IPRs to the Economy: A study released by the Organization for Economic Co-operation and Development (OECD) titled ‘Policy Complements to the Strengthening of IPRs in Developing Countries-2010’ according to,

A 1% increase in trademark protection leads to a 3.8% increase in FDI;

A 1% improvement in patent protection leads to a 2.8% increase in foreign direct investment; And

A 1% improvement in copyright protection leads to a 6.8% increase in foreign direct investment.

Promotion of foreign exchange: It is believed that strengthening the IPR regime in India will encourage foreign exchange inflows, which will help in boosting economic growth and creating productivity and employment opportunities in the country.

Problems Related to IPR in India

The low number of patents: In 2019, only 24,936 (~25000) patents were granted in India, which is significantly less than the 3,54,430 and 4,52,804 patents in the US and China respectively.

At the same time, the rate of increase in the number of patents in India has also not been more satisfactory or impressive than that of the US and China.

Counterfeiting and Piracy: Counterfeiting and other intellectual property-related crimes including piracy are among the growing threats to IPR, which can be regulated and efficiently controlled through appropriate measures.

Data Exclusivity: Foreign investors and MNCs often allege that Indian law does not protect them from improper use of test data submitted to the government when applying for commercial approval for pharmaceutical or agro-chemical products. Huh. For this, a specific ‘Data Exclusivity Law’ is being demanded.

India remains on the Priority Watch List of the United States Trade Representative (USTR) for alleged infringement of intellectual property rights.

It’s latest ‘Special 301’ report released by USTR has termed India as ‘one of the most challenging economies in the world’ regarding protection and enforcement of intellectual property.

way ahead

Role of State Governments: State Governments can play the role of constructive partner in the development of a sound IPR regime by formulating their own strategies and policies within the broader framework of Indian policy on Intellectual Property Rights.

They should actively participate in the development of policies that will sensitize people on the importance of intellectual property rights, encourage innovation in educational institutions and establish state-level innovation councils, enforce IPR laws and prevent intellectual property crimes. Focus on curbing.

Civil society participation: It is also important to include suggestions from members of civil society, as they have been a major contributor to India’s development.

Encouraging NGOs: NGOs associated with craftsmen and artisans and operating in hilly and tribal areas can be engaged to spread awareness regarding IPR to the target groups.

Simultaneously, necessary ‘tool kits’ can be provided to promote IPR which can be used in training.

IPR facilitation centers should be set up in Tier-I, Tier-II, and remote areas of the country with a focus on raising awareness among MSMEs, small businessmen, and traders.

Promoting scientific temper: During training programs and workshops organized by the Department of Commerce for MSMEs, small traders, and local artisans, participants were made aware about identifying innovation or exceptionalism in their products and protecting these innovations in the form of IPRs Must go

Review of IPR Policy: Re-evaluation of existing policy is critical in the light of new and emerging trends in innovation and research, which requires a sound mechanism to protect them in the form of IPRs.

In addition, the relevance and utility of cutting-edge technologies like Artificial Intelligence (AI) and Machine Learning in the present world can also be taken advantage of.

A separate category of rights should be created to protect AI and AI-related inventions and solutions in the form of IPR.


It is very important for a developing country like India to balance economic development with welfare issues. An efficient and equitable intellectual property system can help all countries realize the potential of intellectual property as a catalyst for economic development and social and cultural well-being.

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