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Services trade involving cross-border data flow remains a concern for India and New Delhi has conveyed its reservation on government procurement, intellectual property and data flow to the European Union (EU) and the United Kingdom (UK) during the trade negotiations that are going on with these two entities.

The Economic Times has reported that India is firm on not allowing cross-border data flow since there is no e-commerce policy right now. Officials made it clear that if India agreed to patent extensions and data exclusivity, it would affect the manufacture and distribution of generic medicines in this country.

MSME procurement
India is also in favour of continuing its policy of procuring one-fourth of government purchases from medium and small-scale companies, the report claimed. The government cannot go back on this policy of creating space for this burgeoning sector, New Delhi has communicated at the negotiating table.

“The digital space and intellectual property rights are evolving areas. The red lines like data are to be kept away,” said an official not named in the report.

Incidentally, EU has been seeking intellectual property rights red line for a long time. If India agrees to it, it might affect production of generic drugs in India, which is a requirement for a large number of people.

Patent Act under scrutiny
The Patent Act of India has been under scrutiny by the EU and UK, both of which want changes in the legislation, especially in the pharma industry in order to allow evergreening of patents.

Evergreening of patents refers to tweaking drugs to stretch their patent term. Its potential beneficiaries are the companies that hold these patents. The Indian Patents Act 1970 introduced provisions to prevent evergreening of patents since it would benefit innumerable poor people who cannot afford to buy expensive drugs.

The official said that India needs generic drugs while the EU and the UK are bent on making space for patented medicines. However, experts pointed out that even if the EU and the UK give concessions on the data flow front, New Delhi should not yield ground on the service chapter.

Any commitment on digital trade might signal a permanent change in the policy of India on e-commerce at the WTO where New Delhi expressed its opposition to any binding commitment. Experts also said it could also have implication for the country’s security.

So far India has not made any commitment to digital trade to other countries. The objective is to preserve the space for framing national digital sector policies. India has a booming digital space that has the potential to employ millions and spin great economic benefits for the country’s entrepreneurs.