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Posts Tagged ‘MNC

Washington shakes an IPR fist at India

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As we had expected in 2013 December, the mutual back-slapping over the WTO ‘deal’ between Indian and the USA evaporated very quickly indeed in the face of American business aggressiveness. For the US industry, business and trade associations and lobbies, ‘partner’ means vassal, ‘deal’ means binding obligation, ‘priority’ and ‘sanction’ become weapons (which hurt the poor and vulnerable the most), and ‘trade’ itself means subservience.

And this is why this week, the last of 2014 February, the National Association of Manufacturers in the USA – which represents some 50 American business groups – asked the US Trade Representative to designate India a Priority Foreign Country in its 2014 report. “This designation appropriately would rank India among the very worst violators of intellectual property rights and establish a process leading to concrete solutions,” NAM said in a letter to US Trade Representative Michael Froman.

In its official foreign policy and business pronouncements on India, the government of the USA, its representatives and its agents adopt a tone reminiscent of the 1950s, when American foreign policy and its agricultural scientists joined forces to bulldoze a green revolution in India. Here and now too, the USA likes to hear itself make statements such as “the promise of the 21st Century depends squarely on a robust US-India commercial and strategic partnership” and “central to this partnership will be the co-development and sharing of our best technologies, as well as free-movement between our economies of our best minds and thinkers”.

But the US doesn’t do diplomacy. America’s manner and approach has always been, my way … or else. And that is why one of the most powerful factors influencing Indo-American business and trade connections, the US India Business Council, through its seniormost officer (Ron Somers, who had worked for the energy company Cogentrix in Karnataka), called “attention to India’s need to calibrate regulations to protect data, or inspire India’s future legislature to adjust its Patent Act to align more wholly with international norms particularly regarding incremental innovation”. The USIBC also bluntly said: “Everyone agrees that India needs to spend more on its healthcare system” and that “evolving ecosystems that reward and protect Intellectual Property will be crucial”.

These disagreements between India and the USA have surfaced anew because the USTR is holding public hearings for its annual report, scheduled to be issued in April. This report will be on countries that the US government thinks are “denying protection of IP rights or fair market access to US firms”. The USTR has said that “India is widely perceived in Washington as a serial trade offender, with US firms unhappy about imports of everything from shrimp to steel pipes they say threaten jobs, as well as a lack of fair access to the Indian market for its goods”.

This is among the most signal, and deliberate, failures of the two UPA terms of government – that its reckless and dangerous chasing of foreign direct investment and its reckless and dangerous opening of domains previously in the public sector to private interests have left Bharat and India in such a crippled state that we as a country tolerate such an insult. There is not the slightest hint of fairness in America’s bullying ways, for it wants nothing less than the capitulation of India’s pharmaceuticals industry, and it wants the handing over of insurance – from life insurance to automotive to weather – to its own freebooting companies whose practices have assisted the plunge of a sixth of America’s population into poverty over the last decade.

What may happen now? There are press reports that India may take the USA to face the WTO’s dispute settlement mechanism if included by the USTR in the ‘Priority Foreign Country’ list for intellectual property rights. American industry and trade lobbies are putting pressure on their government to include India under this list. Thus far, the position held within the central government is that the demand (from the US companies) is “completely wrong” as India’s intellectual property rights are compliant with global laws, including that of the World Trade Organisation (WTO).

It is concerning pharma that the American MNCs are most vociferous. US pharma companies had objected to India’s move to issue a compulsory license in 2012 to Hyderabad-based Natco Pharma to manufacture and sell cancer-treatment drug ‘Nexavar’ at a price over 30 times lower than charged by patent-holder Bayer Corporation.

A delegation from the US International Trade Commission (USITC), described as a quasi-judicial agency, has arrived intending to probe the impact India’s policies on trade and investment have on the American economy (the intention is to supply the USTR with ammunition and to prepare for a WTO dispute confrontation; the Americans involved perhaps cannot see or appreciate the irony of the USIBC also praising India for investing in the USA and creating jobs there).

The USITC has raised the Natco matter, and has also raised the rejection of patent to Bristol-Myers Squibb’s Sprycel and Novartis’ Gleevec. It has stated that Indian IPR laws are not Trade Related Aspects of Intellectual Property Rights (TRIPS) compliant under the WTO. The response of the government of India has been to ask all its officials to stay away from any interaction with the USITC delegation.

But we have stood firm till here. Swiss pharmaceuticals manufacturer Novartis AG had lost a legal battle for getting its blood cancer drug Gleevec patented in India and to restrain Indian companies from manufacturing generic drugs. The Supreme Court had rejected the multinational company’s plea last year in a judgement that was loudly and widely hailed in all countries of the South. This came as a blow to the US-EU pharma MNCs who see the very much larger populations of the South as new markets. Hence the threatening fist-waving by the US government.

The complaint by American companies that India refuses to implement laws to provide data protection and to provide patents for bio-pharmaceutical companies is framed in terms of being against the interest of Americans in terms of jobs and ‘fair’ competition in the global marketplace. To support such nonsense, the US Chamber of Commerce’s Global IP Centers issues what it calls an International Intellectual Property Index, which compares the IP laws and implementation of those laws of 25 countries. In the 2014 Index, India received the lowest overall score, with a score of 0 for ‘Membership and Ratification of International Treaties’ and 0.25 for ‘Trade Secrets and Market Access’.

India’s policy on generic drugs has so far refused to accept ‘evergreening’, a scheme used by pharmaceutical companies to continue having a patent over a drug – even after its patent has expired – by modifying it slightly. India’s decision to grant compulsory licenses (within Indian and WTO rules) to anti-cancer drugs by Novartis and Bayer has infuriated Big Pharma in the US. To retaliate, the USA banned Ranbaxy selling medicines from its fourth plant in the USA – so much for being ‘fair’ at home in America; why does Ranbaxy continue to want to do business there?

India’s generic drug policy is guided by the need to provide cheap medicines to a large population that cannot afford even a fraction of the international patent-protected prices of these medicines, as several authoritative civil society responses to the matter have competently pointed out. This is the practice the judiciary has supported and this is the practice that must not change under any circumstance and regardless of the threats and blandishments by Froman and his shylockian collaborators.

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The day India said ‘yes’ to Wal-Mart

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Update – The real nature of the neoliberal economy of India has become clearer with the decision – against the run of public opinion and against the evidence from the agricultural and food sectors – to permit opening up the retail sector.

Since the decision was taken, the central government has spared no effort in a cynical and devious campaign to claim that permitting foreign direct investment in retail will benefit farmers and consumers. On Sunday, 27 November 2011, large advertisements were released in newspapers proclaiming the benefits of this decision. Nothing is further from the truth. India’s urban households, those eking out livelihoods from informal work and precarious manufacturing sector jobs, recognise the untruth and see the evidence in the 10%-15% annual food inflation. Our trade unions know this and our left parties know this.

Ranged against this population, rural and urban, are the ministries and industries who see in the permission a new means to control access to food and the provisioning of food. That is why I support the opposition represented by the Communist Party of India (Marxist), whose concerns reflect those of this broad majority.

The CPI(M) has said correctly that this decision “will destroy the livelihoods of crores of small retailers and lead to monopolisation of the retail sector by the MNCs”. The party’s statement said: “Coming in the backdrop of persistent high inflation, growing joblessness and agrarian distress, this decision shows the utterly callous and anti-people character of the UPA Government. The Government seems to be more eager to meet the demands of the US and other Western governments and serve the interests of the MNCs like Walmart, Tesco and Carrefour, rather than protect those of its own people.”

India’s central ministries – now even further disrobed to reveal their predatory nature as instruments of the country’s business satraps – have held up the flimsy excuse that conditions imposed will safeguard the farmer, consumer and small retailer. This is lies.

The restriction that foreign retail outlets are limited to operating in cities of over 1 million population is meaningless because those are precisely the places where the MNCs want to go, to tap the lucrative segment of the market. It is in these cities – there are 53 cities with populations of over a million – that small retailers are mostly concentrated. India has the highest shopping density in the world, with 11 shops per 1,000 persons – these have evolved as neighbourhood suppliers and represent a cultural integration of small supplier and household familiarity.

The result is a rich density of trusted small retail – India has over 12 million such shops and these employ directly over 40 million persons. Well over 95% of these shops are run by self-employed persons in floor areas of under 500 square feet (about 48 square metres). It is these small shopkeepers in urban areas who fear for their future with the now-sanctioned entry of the MNC retailers. International experience shows that supermarkets everywhere invariably displace small retailers. Small retail has been virtually wiped out in the developed countries like the US and Europe. South East Asian countries had to also impose stringent zoning and licensing regulations in order to restrict the growth of supermarkets, after small retailers were getting displaced.

Then there is the cunning untruth that the condition for making at least 50% of the investment in ‘backend’ infrastructure will benefit rural populations, as this is said to lead to more cold chains and other logistics, benefiting the farmers. International experience has, however, shown that procurement by MNC retailers do not benefit the small farmers – we have seen this in India despite the specious and manufactured ‘case studies’ produced by India’s management schools (the several worthless and compradorist Indian Institutes of Management and their similarly worthless competitors). Over time, smallholder farmers receive depressed prices and find it difficult to meet the arbitrary quality standards. Allowing procurement by MNCs will also allow the central government to reduce its own procurement responsibilities, and this will directly affect the food security of those millions of rural and urban households which depend India’s public food distribution system.

2011/11/25 – This is a turning point for India’s economy. The central government has allowed foreign investment up to 51% in the retail sector for ‘multi-brand’ ventures, and has allowed 100% foreign investment for single brand retailers.

With this permission, the ruling United Progressive Alliance has ignored utterly the concerns of hundreds of representations made over the last year by small traders and wholesalers, and by grocery shops’ assocations all over India, against the entre of foreign direct invetment in the retail sector. The ruling United Progressive Alliance has also ignored the needs and conditions of hundreds of thousands of smallholder farming families, who will from now on be steadily exposed to increasing levels of coercion to submit to corporate and industrial farming pressures, or to quit cultivation and join the masses of informal labour in urbanising towns and cities.

India’s powerful business and indutries associations – the Confederation of Indian Industry (CII), the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Associated Chambers of Commerce and Industry of India (ASSOCHAM) – have vigorously for the last two years been manoeuvring the ruling political alliance towards this position. They have been aided substantially by representations from the countries and regions who have the most to gain from this permission being given – the USA and the European Union.

The so-called economists and analysts who are regularly polled by the business media and whose pronouncements are used to justify the progression of policy towards such permission, are making a variety of claims about the effects the expected foreign investment will have on India. They are saying that this “much delayed reform” will help unclog supply bottlenecks and help ease food inflation, that it will benefit farmers who can get better prices for their produce and will bring in international expertise to streamline supply chains in India.

This is rubbish meant to distract. The big retail corporations have for years been demanding entry into a country which is estimated to have a retail sector whose annual sales are said to be around US$450 billion. But this is a sector populated by tens of thousands of tiny family-run shops that account for 90% of this enormous volume of sales. This is a turning point for India’s economy, for it signals the start of yet another struggle to first block, and then throw out the retail conglomerates.

Here are some of the many news stories on this important matter:

Moneycontrol.com – ‘Don’t expect investments to flow instantly: Bharti Walmart’ – After a long wait, the government has finally allowed 51% foreign direct investment (FDI) in the multi-brand retail. It has also decided to raise the cap on foreign investment in single-brand retailing to 100% from the current 51%. …

The Hindu – ‘Cabinet approves 51 per cent FDI in multi-brand retail’ – In a bid to remove the impression that UPA II was suffering from “decision making paralysis” and kicking off the second generation reforms, the Union Cabinet on Thursday gave its approval to allowing 51 per cent foreign direct investment (FDI) in …

Shanghai Daily (subscription) – ‘India to allow global chains to open multi-brand retail stores’ – MUMBAI, Nov. 24 (Xinhua) — India’s cabinet has given the green light to foreign investors to take up to 51 percent stakes in multi-brand retail stores later Thursday after a meeting chaired by Prime Minister Manmohan Singh, said a report by the …

MarketWatch (press release) – ‘Government of India Unleashes Potent Phase II Reforms’ – WASHINGTON, Nov 24, 2011 (BUSINESS WIRE) — The US-India Business Council (USIBC) today hailed India’s steady progress in advancing major economic reforms with the Cabinet’s approval of opening India’s vast multi-brand retail sector to foreign direct …

Reuters India – ‘India opens supermarket sector to foreign players’ – India threw open its $450 billion retail market to global supermarket giants on Thursday, approving its biggest reform in years that may boost sorely needed investment in Asia’s third-largest economy …

Wall Street Journal – ‘Carrefour Welcomes India’s Decision To Open Multi-Brand Retail Market‘ – PARIS (Dow Jones)–French retail giant Carrefour SA (CA.FR) said Thursday it welcomed the Indian government’s decision to open the country’s multi-brand retail market to foreign investment. “Carrefour will follow with attention the finalization of the …

Voice of America – ‘India Opens Retail Sector to Foreign Supermarkets’ – November 24, 2011 India Opens Retail Sector to Foreign Supermarkets VOA News India’s Cabinet has approved a plan to open up the country’s $450 billion retail sector to foreign supermarkets, a reform that could unclog supply bottlenecks that have kept …

Wall Street Journal – ‘India Unlocks Door for Global Retailers’ – MUMBAI—India paved the way for international supermarkets and department stores to establish joint ventures, a major step in opening one of the last great consumer markets that has been off-limits to many of the world’s biggest …

Hindustan Times – ‘Left and Right sharpen knives for FDI battle’ – The Cabinet’s approval of 51% FDI in multi-brand retail is likely to flare up into a major political controversy with the main opposition parties gearing up to oppose it. While BJP leaders Sushma Swaraj and Arun Jaitley jointly condemned any such move …

Namnews – ‘Government Opens Up Country’s Retail Market’ – It’s official – the Indian retail market is now open to international chains, setting the stage for a major change of the local industry. Earlier today, the Indian government approved Foreign Direct Investment of up to 51% in multi-brand retail, …

Bloomberg – ‘India Allows Foreign Investment in Retail, Paving Wal-Mart Entry’ – India approved allowing overseas companies to own as much as 51 percent of retail chains that sell more than one brand, paving the way for global retailers such as Wal-Mart Stores …

indiablooms – ‘India opens retail to foreign players’ – New Delhi, Nov 24 (IBNS): India on Thursday decided to allow foreign direct investment (FDI) in its closely-guarded multi brand retail market, paving the way for global supermarket giants to step into the $450 billion sector that was widely seen as one …

Tehelka – ‘Cabinet approves 51% FDI in multi-brand retail’ – The Cabinet cleared 51 per cent foreign direct investment (FDI) in multi-brand retail on Thursday paving the way for global retail giants like Wal-Mart and Carrefour to enter India. The Cabinet also cleared 100 per cent FDI in single-brand retail. …

Newser – ‘India to allow more foreign retail investment, likely paving way for Wal-Mart’ – India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global …

NetIndian – ‘Cabinet clears 51% FDI in multi-brand retail’ – After dithering for a long time, the Union Cabinet today cleared a proposal to allow 51 per cent Foreign Direct Investment (FDI) in multi-brand retail and raised the cap to 100 per cent in single brand retail. This will allow global retail giants like …

Boston.com – ‘India opens more to foreign multibrand retailers’ – AP / November 24, 2011 NEW DELHI—India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global …

Retail Week – ‘Indian cabinet approves foreign investment in retail‘ – The Indian government has cleared the way to allow multinational retailers including Tesco, Carrefour and Walmart to enter its retail market. We provide a range of advertising opportunities. By advertising with us, you are guaranteed to reach the …

Atlanta Journal Constitution – ‘India opens more to foreign multibrand retailers’ – AP NEW DELHI — India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global retailers such as …

Houston Chronicle – ‘India opens more to foreign multibrand retailers’ – NEW DELHI (AP) — India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global retailers such …

IBNLive – ‘FDI in retail cleared; multi brand 50 pc, single brand 100 pc’ – The Union Cabinet FDI in multi-brand retail and single brand retail despite division within the UPA on the issue.

Moneycontrol.com – ‘Cabinet approves 51% FDI in multi-brand retail’ – Indian retailers finally get a chance to rejoice as the Cabinet today cleared the bill to increase foreign direct investment to 51% in multi-brand retail and 100% in single brand. Commerce and industry minister Anand Sharma said that he would give a …

Business Standard – ‘Too early to celebrate for Pantaloon retail’ – Valuations may prove to be a hurdle, while real gains will take time to yield. Stocks of organised retail companies like Pantaloon Retail and Shoppers Stop have been in action in the recent past on hopes that foreign direct investment (FDI) in the …

BusinessWeek – ‘India Allows Foreign Investment in Retail, Paving Wal-Mart Entry’ – Nov. 24 (Bloomberg) — India approved allowing overseas companies to own as much as 51 percent of retail chains that sell more than one brand, paving the way for global retailers such as Wal-Mart Stores Inc. …

Washington Post – ‘India to allow more foreign retail investment, likely paving way for Wal-Mart’ – NEW DELHI — India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global retailers such as Wal-Mart. …

STLtoday.com – ‘India opens more to foreign multibrand retailers’ – AP | Posted: Thursday, November 24, 2011 10:36 am | Loading… India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to …

Newser – ‘India to allow more foreign retail investment, likely paving way for Wal-Mart’ – India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global …

Wall Street Journal (blog) – ‘FDI in Retail: If Wal-Mart Builds It, Will Indians Come?’ – The Indian government deserves credit for doing what , for at least five years, it has been contemplating: setting the stage for the creation if a modern retail industry. It is unlikely that the Cabinet was seized by Adam Smith-like …

Houston Chronicle – ‘India opens more to foreign multibrand retailers’ – NEW DELHI (AP) — India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global retailers such …

Zee News – ‘Cabinet clears FDI in multi-brand retail’ – New Delhi: In a major decision, the government Thursday approved 51 percent FDI in multi-brand retail paving the way for global giants like WalMart to open mega stores in cities with population of over one million. The nod from the Union Cabinet came …

This permission, given by a ruling political coalition that has allowed food inflation to rage on unchecked for the last three years, which has regularly pushed up the prices of petrol (gasoline) and diesel, and whose record on tackling corruption and graft is shamefully weak, will not go unchallenged.