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Between 2008 and 2018, China was the country most often mentioned in NYT headlines, and was the most commonly mentioned nation in ten of twelve months. China is in the news so frequently, in large part because of its spectacular economic rise, and the United States trade war against China in response. India’s has had one of the fastest growing economies in the world over the last ten years, and total exports of manufactured goods and services has doubled over this period, faster than any other nation in the G20. India’s rise as a major power in the world of global trade has inevitably led to frictions and new trade disputes. In today’s podcast episode, I am going to explore the implications of India’s economic rise on the rules that govern international trade today. I will be discussing India’s trade conflicts surrounding its tariffs and subsidies to agriculture, India’s conflict over its more permissive interpretation of intellectual property laws, and its desire for greater access to trade related visas to the United States and other nations.

India will be holding elections for the Lok Sabha, India’s parliament, through April and May of 2019. Given that approximately two thirds of India’s population lives in rural areas, voter turnout rates in rural areas are consistently higher than in urban areas, and rural regions are overrepresented in the Lok Sabha, it is unsurprising that Indian politicians heavily court the rural vote. For example, the government of Narendra Modi increased agricultural subsidies by 15%, in the run-up to the Indian elections. However, these subsidies and the broader need to appeal to the rural electorate has created major tensions with India’s trading partners. Subsidizing India’s milk industry has long been a cornerstone of Indian rural development strategy, but a major glut in milk production has led to serious rural unrest. The states of Gujarat and Maharashtra, two major milk producers, responded by offering a $727 subsidy a ton on milk exports to find international markets, but major milk producers such as New Zealand and United States by lodging protests at the WTO. Similar complaints have been issued for India’s subsidies, to cotton, rice, sugar and other crops and India’s subsidy regime has made it difficult to negotiate trade agreements with countries afraid they would be flooded by subsidized Indian production.

Although India is heavily reliant upon agriculture today, it’s industries of the future will rely upon technology instead. India has long been in conflict with wealthy nations over issues of intellectual property. In 1970, India passed a major reform to its intellectual property law that excluded pharmaceuticals from product patent production. The law saw a proliferation of drug makers focused on bringing the price of medicines down. Most dramatically, Indian drug makers were essential in bringing the price of a years supply of HIV drugs down from $10,000 to $200. However, as India’s economy liberalized in the 1990s, India sought to join the WTO. The WTO, however, felt that Indian drug makers, who did not have to invest in research and development, to flood markets with copy-cat products. India (and other nations seeking to join the WTO) forced India to sign up to certain minimum standards on IP production, known as TRIPS (Trade Related Aspects of Intellectual Property Rights). By signing up to TRIPs, Indian drug makers gained access to developed country markets. The US today imports $5 billion worth of pharmaceuticals, and 40% of generics are made by Indian companies. One notable area where Indian generic drug manufacturers do not have access to the Indian market is insulin. Insulin prices have soared from $2,864 to $5,705 from 2012 to 2016 in part due to the oligopoly of Sanofi, Eli Lily and Novo Nordisk. In 2015, Glargarine, a common form of insulin off-patent. Indian generic drugmaker Biocon quickly came to market with their generic and gained easy approval in Japan, the EU and the UK. However, Biocon’s Glargine has struggled to gain approval in the US, as it has been held up in courts over IP infringement.

India’s conflict with the US extends beyond intellectual property into issues of immigration as well. India’s IT services export industry’s origins lie in bringing skilled IT workers on short-term work visas to the United States. In the early 2000s, the typical Indian programmer earned only a quarter of their American counterparts. This process, known as Body-Shopping, allowed Indian programmers to earn strong salaries by Indian standards and American corporations to have access to cheap labor. The type of work visa most under contention has been the H1-B visa, a temporary work visa for skilled workers that offer 65,000 openings to foreign workers at renewable terms. The US government, since the presidency of Obama, has steadily been raising the processing fees of H1-B visas in order to curtail body-shopping. This process has accelerated under Donald Trump, with processing times being deliberately slowed down, and regulations such as the ban on employment authorizations for the spouses of H1-B holders. India launched complaints against the US in the WTO, arguing these visa rules discriminate against Indian workers and companies and negotiations over access to visa access have been part of recent US trade deals with Singapore and Chile. There is a longstanding connection between trade and immigration, and India’s economic rise is likely to bring immigration issues to the forefront of global trade negotiations.

India’s economic rise is causing global institutions to rethink international trade norms surrounding agriculture, intellectual property and immigration. The economic rise of China has caused a tectonic shift in global trade negotiations. The rise of India is likely to cause a similar change in coming decades. Whatever the outcome of these trade disputes, it is likely to plaster the headlines of newspapers throughout the world.

Selected Sources:
The Effects of Malapportionment on Cabinet Inclusion: Subnational Evidence from India Rikhil Bhavnani
The white revolution—How Amul brought milk to India, Venkatkrishna Bellur, Saraswathi Singh, Radharao Chaganti, “
Intellectual Property System of India, N R Subramanian
Innovation and intellectual property rights law—an overview of the Indian law, S. Ravindra Bhat
Bodyshopping versus Offshoring among Indian Software and Information Technology Firms Sumit K. Majumdar,

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