BRAVE NEW WORLD: ON THE INDIA-EUROPEAN FREE TRADE ASSOCIATION AGREEMENT AND IPR

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THE CONTEXT: As the draft of the Trade and Economic Partnership Agreement (TEPA) between India and European Free Trade Association (EFTA) has been finalised. There is a strong likelihood that India and the European Free Trade Association (EFTA) would soon enter into a free trade deal.

WHAT IS EUROPEAN FREE TRADE ASSOCIATION (EFTA)?

• The European Free Trade Association (EFTA) is the intergovernmental organisation of Iceland, Liechtenstein, Norway and Switzerland.
• It was set up in 1960 by the Stockholm Convention for the promotion of free trade and economic integration between its members.
• The main tasks of the association are threefold:
• Maintaining and developing the EFTA Convention which regulates economic relations between the four EFTA states.
• Managing the Agreement on the European Economic Area (EEA Agreement), which brings together the Member States of the European Union and three of the EFTA States – Iceland, Liechtenstein and Norway – in a single market, also referred to as the “Internal Market”.
• Developing EFTA’s worldwide network of free trade agreements.

What is India- EFTA trade agreement?

• It is a broad-ranging agreement that is being negotiated between India and the four countries since 2008 to increase investment by these countries in India and reduce tariffs, on a range of exports from these countries.
• Trade and Economic Partnership Agreement (TEPA) is the name of free trade negotiations between India and EFTA Countries.
• Over the past two decades, the total trade between the EFTA States and India has been growing steadily. In 2022, the combined EFTA-India merchandise trade surpassed USD 6.1 billion.
• The primary imports to the EFTA States consisted of organic chemicals (27.5%), while machinery (17.5%) and pharmaceutical products (11.4%), excluding gold, constituted the main exports to India.

ISSUES:

• IPR rights: There is a bone of contention relating to intellectual property rights and has persisted as an issue since 2008.
• Constant tussle between inventors and generic drug companies: There is a constant tussle between the inventors and the generic-drug companies over the issue of affordability. The nature of the pharma industry costs much to discover a useful effective drug and relatively little to make generic copies of it.
• Issue of data exclusivity: Data exclusivity is an embargo clause that puts a minimum of six-year embargo on clinical trial data generated during the testing and development of a drug. Data exclusivity also applies to drugs not patented in India. This ensures adequate Intellectual Property Rights protection for the original drug manufacturers and incentivising innovation and R&D. However, it hampers the development of cheap generic drugs in the developing countries, particularly India and decreases the accessibility and affordability of latest drugs, hampering healthcare outcomes.

THE WAY FORWARD:

• Invest in research: India’s rise in the drug manufacturing chain in the last few decades means that it must invest in an ecosystem that can conduct ethical drug trials and make new molecules and therapeutics from scratch. The government must invest in fundamental research to be able to develop reliable drugs. It can be done by providing grants or incentives to pharmaceutical companies to invest in research and development of generic versions of essential medicines.
• Address the monopoly of the west: There is a need to change the perception and situation that drug development do not remain confined to the west. For example, during covid 19 pandemic a lot of development of several novel technology approaches to developing vaccines was seen in India.
• Utilising anti-counterfeiting technologies for counterfeit drugs: It can be done through imaging technologies, variable data printing of unique numbers or barcodes with speciality inks, including invisible inks, and with RFID.
• Strong regulatory framework:There is a need to strengthen regulations that ensure the safety, quality, and efficacy of generic medicines. It can be done by creating a clear approval process for generic drugs to enter the market.

THE CONCLUSION:

India has firmly rejected the demand from four European nations in the EFTA bloc for the inclusion of a ‘data exclusivity’ provision in proposed free trade agreements, citing its commitment to protecting the interests of the domestic generic drugs industry. As negotiations with EFTA progress, India remains focused on promoting fair and equitable trade relations while upholding its principles of protecting domestic industries.

UPSC PREVIOUS YEAR QUESTION

Q. In the present geo-political scenario, the EU and India appear to be natural partners and they need to leverage existing opportunities. Discuss. (2021)

MAINS PRACTICE QUESTION

Q. India’s firm stance against the inclusion of data exclusivity provisions in FTAs reflects its commitment to safeguarding the interests of its generic drug industry. Comment.

SOURCE: https://www.thehindu.com/opinion/editorial/brave-new-world-on-the-india-european-free-trade-association-agreement-and-ipr/article67853988.ece