US Special 301 Report Flags Persistent IP Protection Concerns in India

The United States Trade Representative (USTR) has released its 2026 Special 301 Report, maintaining India on the priority watch list due to continued concerns over the country's intellectual property (IP) protection and enforcement. The report, issued under the Trade Act, is designed to identify countries with inadequate IP regimes and to encourage improvements through diplomatic and, in some cases, economic pressure.

India is among six countries designated on the priority watch list in the latest report. The USTR described India as one of the world's most challenging major economies regarding IP protection and enforcement. This designation carries the potential for further investigation, sanctions, or increased tariffs should the situation escalate, although India has held this status since the 1990s.

The report's India chapter specifically calls for a review of the country's pharmaceutical patent laws, suggesting reforms to facilitate American business interests. Key issues cited include delays in patent issuance, burdensome reporting requirements, and frequent, lengthy pre-grant opposition procedures. The report also raises concerns about India's approach to compulsory licensing in the pharmaceutical sector.

"The US encourages India to continue moving forward with reform efforts to reduce patent pendency times and improve the patent system for all users," the report stated.

Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), commented on the report, noting that while the US criticizes India's IP protection, India maintains that its regime is fully compliant with World Trade Organization (WTO) standards. Srivastava emphasized that the core disagreement stems from India's refusal to adopt stricter, so-called TRIPS-plus standards, which go beyond the requirements of the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

The report also highlights India's continued imposition of high customs duties on IP-intensive products, including information and communications technology (ICT) equipment, solar energy devices, medical devices, pharmaceuticals, and capital goods. India has justified these measures as necessary to promote access to technology, but the USTR views them as barriers to stronger IP protection.

Trade secret protection remains another area of concern. The report notes insufficient legal mechanisms in India to safeguard trade secrets, an issue raised by multiple companies. Although the Indian government has considered enacting dedicated trade secret legislation, progress remains ongoing.

Trademark counterfeiting is also identified as a significant problem. The report points to the widespread availability of counterfeit goods—including semiconductors, electronics, chemicals, medicines, automotive and aircraft parts, food and beverages, consumer products, apparel, toys, and sporting goods—that originate from China, India, South Korea, and Türkiye and are distributed globally.

The USTR expressed particular concern about counterfeit pharmaceuticals. According to the report, India, along with China (including Hong Kong), the United Arab Emirates, and the Dominican Republic, were the top sources of counterfeit pharmaceuticals seized at US borders in fiscal year 2025.

Additional IP challenges cited in the report include unauthorized file sharing of video games, signal theft by cable operators, commercial-scale photocopying and unauthorized reprints of academic books, as well as online and broadcast piracy. The report also draws attention to illicit Internet Protocol television (IPTV) services that unlawfully retransmit copyrighted content through web portals and third-party applications.

As India and the US continue to negotiate a broader trade agreement, intellectual property issues remain a central point of contention, with the US urging further reforms and India defending its current legal framework as compliant with international obligations.