Time To Stem India's Foreign IP Payouts

India needs a new regime to stem the outflow of $8.6 billion a year for using intellectual property of foreign entities. Here's the road ahead.

- RAJIV RANJAN SINGH

WHEN A DISTINCTLY indigenous B2B brand like National Stock Exchange gets its theme song registered as a 'sound mark,' the auditory version of a trademark, you know that India's intellectual property (IP) consciousness is coming of age as the world transitions from manufacturing to knowledge economy.

But realising the potential of its IPs will be a long, arduous road, just as it was for China. In 2008, India's northern neighbour started transforming itself from 'wild west' of IPs engaged in low-value manufacturing, to becoming a global industrial powerhouse. It set a strategic goal of attaining high levels of creation, utilisation, protection and administration of IP rights, and in 2015 filed the highest number of IP applications. In 2019, it filed 25 times more patent applications than India, and two times more than U.S.. In 2019, it was granted 64 lakh-plus trademarks and more than 5.5 lakh design rights, while India was granted 2.94 lakh trademarks and about 12,000 design rights, as per data from Department of Promotion of Industry and Internal Trade.

It is time for India to learn IP kungfu moves from its neighbour as using IP created by foreign entities is proving to be costly. As per IMF Balance of Payments data, India paid $8.63 billion for use of foreign IP in 2021, 56,862% more than $15.1 million in 1981. In comparison, IP owned by Indian entities netted merely $870.1 million. This underlines the need to improve IP protection laws and systems to encourage creation of IP by Indian entities. In 2021, the Parliamentary Standing Committee on Commerce said a mere 1% improvement in copyright protection increases foreign direct investment (FDI) by 6.8%. The same improvement in protection for patent and trademark increases FDI by 2.8% and 3.8%, respectively.