Against the backdrop of trade discussions and the war in West Asia, the United States Trade Representative (USTR) will come out with its annual Special 301 report, a document that assesses its trade partners on their handling of intellectual property rights. The report is scheduled for late April.

The IP report card of sorts could have more of an edge this time, given the geopolitical strife and the bilateral trade discussions underway, caution Indian pharmaceutical industry experts, urging the Centre to ensure that the country’s “health security” is not compromised by potential IP trade-offs.

The Special 301 report has in the past put India on the “priority watch list”, and domestic pharma industry associations have called for a recalibration of that status — as the Indian government has made policy changes to address concerns raised by the US administration, echoing concerns outlined by its own industry representatives, they say.

Ahead of its report, the USTR has received over 100 comments/submissions from across the world, including representations from the Indian Pharmaceutical Alliance (IPA), a platform for large domestic drugmakers, and the Pharmaceutical Research and Manufacturers of America (PhRMA).

India’s situation is different from that of other countries that faced reciprocal tariffs and were negotiating deals involving only that, says Dr Biswajit Dhar, development economist and former professor, Jawaharlal Nehru University. “We have a… full-fledged BTA (bilateral trade agreement),” he adds. “The tariff thing was only round 1. If you have to get a full-fledged agreement, then… other things come in,” says Dhar. And if the Trump administration does not get market access, it could go for other aspects, especially IP, he cautions.

Pharma industry representatives say ( off-record) that the war has added another layer of uncertainty, making trade discussions and potential IP and other concessions that much more critical.  

‘Discriminatory, non-transparent’

In its submission to the USTR, PhRMA raises issues such as the inclusion of some patented drugs in India’s National List of Essential Medicines, which are subject to price controls; features in India’s amended Patents Act such as pre-grant oppositions (allowing a patent application to be contested); and Section 3(d), which prevents companies from extending the patent on a drug through incremental changes that do not add to the medicine’s effectiveness.

Pointing to an “unpredictable patent environment”, PhRMA says, “India’s legal and regulatory systems pose longstanding substantive and procedural barriers for innovators, including impermissible hurdles to patentability per Section 3(d) of India’s Patents Act, 1970.” Further, on the  “lack of patent enforcement” and “discriminatory and non-transparent” policies, the submission says, “The overall lack of transparency, predictability and reasonableness in implementing policies that impact pricing of medicines creates an unviable business environment.”

Health security

Dhar points out that the US administration had been raising these issues earlier too, echoing the concerns of its pharmaceutical industry. These issues “will be pushed… onto the negotiating table and then, of course, they will try to get the best deal out of it”, he says.

Citing the example of agriculture in India, he says farmers ensured that the government took a position in the interest of food security. The ability to produce medicines involves the country’s health security, and “there is no reason why we should treat these two things differently”, he says, adding that the cost of medicines is the largest component in a health budget.

Pointing to the significance of bio-pharmaceutical medicines and Budget 2026’s proposal to boost the manufacture of these drugs, he says the domestic bio-pharmaceutical industry should have the policy space and flexibility to grow.

‘Medicine partner’

In its submission, the IPA points out that “India is not merely a trading partner of the US in pharmaceuticals; it is US’ medicine partner”. In fact, IPA’s member companies are deeply embedded in the US healthcare system through supply and ground operations, “with a significant and ever-growing footprint in the US that includes FDA-approved manufacturing facilities, innovative research and development activities, employment, and long-term investment”, it says. Further, Indian drugmakers supply nearly “half of all generic medicines used in the US”, the IPA said, serving American families, hospitals, and federal healthcare programmes on a daily basis.

Calling for a recalibration, the IPA says, “Continued designation of India on the Priority Watch List no longer accurately reflects the facts on the ground or the trajectory of India’s IP regime and business environment.” Keeping India on this list risks equating countries “that resist engagement or undermine IP protection, with a partner that is actively aligning its system in service of shared objectives”, the IPA noted.

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Published on March 23, 2026