US Maintains India on Priority Watch List Over Ongoing Intellectual Property Disputes

India remains on the United States' Priority Watch List for intellectual property (IP) protection, according to the 2026 Special 301 Report released on April 30. The report, issued by the Office of the US Trade Representative (USTR), highlights persistent differences between the two countries, particularly in the pharmaceutical sector, and underscores India's continued presence on the list since the 1990s.

The Special 301 Report identifies India as one of six countries facing ongoing scrutiny for their IP regimes. The USTR expressed concerns about the protection and enforcement of IP rights in India, focusing on pharmaceuticals and digital products. While the report acknowledged recent steps by India, such as the Patents (Amendment) Rules, 2024 and increased staffing at the patent office, it noted that progress remains inconsistent.

"There continues to be a lack of progress on many long-standing IP concerns raised in prior Special 301 Reports. India remains one of the world’s most challenging major economies with respect to the protection and enforcement of IP," the report stated.

A key point of contention is Section 3(d) of India’s Patents Act, which prohibits the patenting of new forms of known substances unless they demonstrate significantly enhanced therapeutic efficacy. This provision is intended to prevent 'evergreening,' a practice where companies seek to extend patent terms through minor modifications. The USTR argued that such rules create uncertainty for innovators, although India maintains that its approach is fully compliant with World Trade Organization (WTO) norms.

The report also criticized the absence of data exclusivity provisions in India’s IP framework and raised concerns about the country’s compulsory licensing policies. These policies allow third parties to manufacture patented drugs under certain public interest conditions. According to the USTR, these elements contribute to an environment of uncertainty for pharmaceutical innovators.

Additionally, the report highlighted that India is among the top countries of origin for counterfeit pharmaceuticals seized at the US border during Fiscal Year 2025. India was also identified as a leading source of counterfeit medicines distributed globally.

The USTR further flagged high customs duties on IP-intensive products, including information and communications technology (ICT), solar equipment, medical devices, pharmaceuticals, and capital goods. The report questioned whether India has adequate mechanisms to prevent unfair commercial use or disclosure of proprietary test data submitted for regulatory approvals in the pharmaceutical and agro-chemical sectors.

Ambassador Jamieson Greer commented, “We have rigorously reviewed our trading partners' IP practices and expect to take action where needed to protect American innovators and creators globally.”