Global Competition Versus Regional Interests: FDI and Pharmaceuticals in India

William O. Duperon, E. Mine Cinar

Abstract


This essay explores the economic dynamics of global competition versus regional interests corresponding to the treatment of intellectual property rights (IPRs) in India and the relative effects of such policies on its domestic pharmaceutical industry.  The scope of considerations are formally limited to variables implicative of the transnational flow of capital within the pharmaceuticals industry, most specifically those pertaining to foreign direct investment (FDI).    India, as the second most populated country in the world, has been the focus of much discussion regarding patent violations in its pharmaceutical industry. International pressures and membership covenants of the World Trade Organization (WTO) have succeeded in structuring policy such that process patents are now legitimized.  This has brought dilemmas between global and regional conflicts of interest to open discussion, and has become a pressing political agenda among various industry stakeholders.  This paper discusses the history of Indian internal protection in the pharmaceutical industry and suggests ways in which India may continue to benefit when regulatory barriers are reduced and global trade covenants are abided.  The  essay  first examines trends in global FDI and Knowledge Process Outsourcing (KPO).  It highlights changes to Indian policy, and subsequently discusses other matters associated with the protection of IPRs including parallel imports, price discrimination, and corruption.  Lastly, suggestions are made for viable ways of enabling India to comply with WTO mandates for participation in the global marketplace, while concurrently attending to its domestic needs as well. 


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