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India woos ASEAN with generics production, vaccines; wants support in IPR waiver

Apart from securing the support of ASEAN nations for the global intellectual property waiver for COVID vaccines, the move is also aimed at pulling closer the traditional partners in the bloc, who have become close to China, sources say

September 17, 2021 / 01:27 PM IST
Flags of ASEAN nations. Representational Image.

Flags of ASEAN nations. Representational Image.

India has promised the Association of Southeast Asian Nations (ASEAN) full cooperation in generic drug manufacturing, for which the bloc of nations is increasingly becoming dependent on China.

This comes in exchange for ASEAN's support to New Delhi's bid for the global intellectual property rights waiver for COVID-19 vaccines at the World Trade Organization (WTO), sources say. As reported by Moneycontrol earlier, talks on the IPR waiver have stalled and support from the 10 ASEAN nations remain crucial.

At the recently concluded 9th East Asia Summit-Economic Ministers’ Meeting, India promised East Asian partners its willingness to collaborate in the production of generic drugs, medical technologies to treat COVID-19 patients, and vaccines production.

Up to 70 percent of the global vaccines are produced in India and its large capabilities in producing standardized affordable medicines are globally recognized. Reeling under successive waves of COVID-19, and having a mixed bag of experiences with regards to Chinese vaccines, the ASEAN nations have responded favorably to India's overtures, External Affairs Ministry sources said.

Generic generosity

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According to the Department of Pharmaceuticals, India exports one-fifth of global generic drugs by volume. As domestic companies ramp up production, India has held firmly to its long-established moniker of 'the pharmacy of the world'. India's pharmaceuticals industry is the third-largest in the world, with the majority of it focused on generics.

On the other hand, China is a major producer and exporter of low-cost, high-volume active pharmaceutical ingredients (APIs), which go into the making of drugs. China accounts for around 40 percent of all APIs used worldwide while India's dependency on China is an estimated 65–70 percent.

To reduce this, the government had announced a production-linked incentive scheme of Rs.6,940 crores, which seeks to provide financial incentives to eligible manufacturers of 41 products covering 53 APIs.

"To make the scheme even more attractive, the government has later allowed exports under the scheme as well. We have informed the Asean Bloc that exports to their region would not be restricted," a senior official said.

WTO hurdle

Even after talks gained pace in June, nations failed to meet the early August deadline given the differences on the subject.

The powerful TRIPS Council had on June 9 cleared India's proposal for a further debate by all members. All WTO actions are passed only by the full consensus of all members.

It seeks to suspend certain provisions of the TRIPS agreement, which came into effect on January 1, 1995, and is to date the most comprehensive multilateral agreement on intellectual property.

However, it has been hailed as a model law for protecting the commercial rights of countries and corporations, given that it extends the protection for new varieties of plants, the layout designs of integrated circuits, and undisclosed information, including trade secrets and test data.

Suspending parts of this agreement will allow countries to overcome the legal challenges posed by patents to timely provisioning of affordable medical products. Some WTO nations have had to carry out urgent legal amendments to their national patent laws to expedite the process of issuing compulsory/government use licences.

If the proposal becomes global law, a massive ramp-up in the manufacturing of vaccines is expected, especially in poorer nations, which will now get access to the technology and resources to manufacture vaccines.
Subhayan Chakraborty has been regularly reporting on international trade, diplomacy and foreign policy, for the past 6 years. He has also extensively covered evolving industry and government issues. He was earlier with Business Standard newspaper.

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