How IPR impacts India’s economy

Research and innovation is the backbone of any country, especially in a developing one like India. With the government enabling policies that push for innovation, India is poised to become a leading science and technology hub.

Boosting research and development, intellectual property rights (IPR) have contributed significantly to India’s economy. In fact, IPR and economic growth go hand-in-hand. “How?”, you may ask. Intellectual property rights are essentially designed to aid innovators and reward innovation.

Think of it this way: Competition is cut-throat around the world; to stand out among adversaries, India must work on innovation. More and more businesses are setting aside large funds for the sole purpose of innovation and are setting up incubation centres. Other businesses are constantly on the lookout for latest developments that can help improve their efficiencies or march into a new territory for business expansion.

leadershipIn either case, innovators want to make sure that they get the maximum benefit from this outlook of businesses. This is where IPR comes in. With a patent in hand, innovators can issue licenses for mass production, which directly contributes to the economy.

IPR and India

Intellectual property is any innovation of the human mind. It could be art, technology, literary, symbol, or names. Under IPR, innovator rights are protected. This means, the inventor has the right to proprietorship of the invention, which they can decide to licence for mass manufacturing.

IPR protects the monetary as well as non-monetary (reproduction or publication interest of the inventor. Non monetary benefits include due credit to author while reproduction or publication of your work in a scientific journal or for further studies. The importance of intellectual property rights in India is mirrored by the country’s commitment towards IP protection.

In India, intellectual property protection is adjudicated primarily under the Indian Patents Act, 1970; Trademarks Act, 1999; Geographical Indications of Goods Act, 1999; Industrial designs Act, 2000; and guidelines on protection of Computer-Related Inventions.

Apart from this, the country has signed pacts under the Berne Convention, Copyrights Act, and Information Technology Act, 2000. It has also set up a National Intellectual Property Rights Policy in line with the World Trade Organisation’s agreement on TRIPS (Trade Related aspects of IPRs).

IPR and economic growth

According to data from the World Intellectual Property Organisation (WIPO), the number of patents filed in India in 2018 was more than 2.5 times those filed in 2009. In the same period, India’s gross domestic product has almost doubled.

This could be attributed to the lack of awareness about patenting activities among businesses in the early 2000s. However, over time, businesses and policymakers have identified IPR as a model for economic growth. There is an increased focus on research and awareness of patenting processes. A strict patent regime has worked in the favour of a developing country like India, according to WIPO.

India has the unique ability to mass produce more affordable varieties of a technology by reverse-engineering non-patented products. Owing to inexpensive production costs, India has also been a recipient of technology transfer offers from more developed countries. In the healtcare sector, India has been a pioneer in reproducing technologies from advanced countries and making them affordable and accessible to a wider population.

At the same time, there is a growing concern that as the country moves from developing to developed status, this patent regime will deter economic growth. This concern stems from the belief that as a country becomes more developed, instances of technology transfers may dip.

Developing countries such as India depend heavily on research and innovation to improve human development indices and to find contemporary solutions to everyday problems.

While data suggests a direct link between IPR and economic growth, there are other factors that may influence this relationship. For example, in a developed economy, research and innovation is focussed on solving problems faced by developed countries. This leaves developing countries to fend for themselves and look for solutions faced by these countries, albeit with limited resources. In a nutshell, the relationship between IPR and economic growth in a developed country is different from that of a developing country.

Challenges in IPR and economic growth

One of the biggest challenges in the field of IPR is the lack of IP protection laws for contemporary technologies. Take for instance artificial intelligence, Indian laws do not recognise algorithms and codes as patentable, thus posing a problem for innovators working in the field.

India currently lacks robust protection policies for the latest technologies, even though the government has acknowledged the importance of these laws.

What makes matters worse is the lack of a comprehensive law that takes care of all IP protection criteria. Existing laws work in silos and often innovators are left confused about how to best defend their work from misuse.

Final note: IPR has the potential to improve economic growth of a country significantly. Protection of intellectual property drives research and innovation. Licenced innovation pushes businesses to invest in new technologies that can have a large social impact.

However, the existing IP protection laws are inadequate to manage innovation emerging fields of technology. This could have a detrimental effect on the country’s economy. To be able to leverage the country’s true potential, a comprehensive set of IP protection laws are the need of the hour.


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