Policy Brief – Intellectual Property Rights in Global Value Chains: The State of Play in India

As emerging economies look to enhance their participation in GVCs and improve the quality of goods and services provided by their local industries, the role of intellectual property (IP) has assumed great importance. IP is estimated to add, on average, twice as much value as tangible capital to products traded and manufactured along GVCs. In the Global Value Chain Development Report, it has been argued that a strong IP regime can potentially benefit emerging economies by drawing ‘spillovers’ of knowledge and R&D and incentivizing multinational corporations concerned about leakages of technological know-how. Conversely, weak IP regimes in countries are seen as impeding participation in GVCs, especially the higher value-added activities in GVCs. As an apparent consequence, countries are increasingly entering into deep preferential trade agreements, which set rules on IP protection that go beyond the 1990s-era provisions of the WTO TRIPS Agreement. In the case of India, its geopolitical and macroeconomic positions are arguably much stronger than those of most other developing countries. Indeed, in recent years, India’s domestic priorities have progressively aimed to promote innovation, and simultaneously provide greater IP protection to both domestic and international rightsholders, with the intention of improving India’s participation in GVCs. This document provides a brief overview of a few notable policy initiatives in this regard, along with areas of potential reform in India’s IP regime.