As per the Europe India Chamber of Commerce (EICC), India needs to modify its Intellectual Property Rights (IPR) regime and fast-track legal system to attract foreign investments. In its latest report, the EICC has highlighted that reforms need to be initiated in trade facilitation and export promotion as most of the EU companies find out that the actual market scenario in India is distinctly difficult for business than their original understanding. Though, Indian government has taken various steps to remove FDI barriers in a range of sectors, modalities such as land acquisition and revenue sharing must be discussed and debated by the States and Centre before taking a formal policy decision.
The EICC too raised concerns over India's IPR laws in the pharmaceuticals sector stating that the use of compulsory licensing (CL) for essential pharmaceutical drugs must be exception and not the norm. However, Indian government has maintained that its IPR laws are in compliance with World Trade Organization (WTO) norms.
Further, the report stated that despite the various challenges facing the Indian economy, EU firms are optimistic about the next 5 years. India must simplify its complex regulatory and tax structures to ensure continued high levels of FDI from European firms. During the period 2004 and 2013 European companies invested $198 billion in India which has boosted India's export competitiveness, generated employment, strengthened the skills base, enhanced technological capabilities and increased financial resources for development. British companies pumped in around $70 billion or about 35.5 percent of the overall EU investments, while Germany is the second largest EU investor with $34.47 billion. During the same period US firms invested $138 billion, while Japan pumped in $50.7 billion in India.
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