INDIA
Reported in 2017 and 2020
Pillar Intellectual Property Rights (IPRs) |
Sub-pillar Enforcement of copyright online
Lack of adequate enforcement of copyright online
Copyright is not adequately enforced online in India. It is reported that, although the country has taken steps against websites with pirated content, there is weak enforcement of IP by courts and police officers, lack of familiarity with investigation techniques, and the continued absence of any centralized IP enforcement agency, combined with a failure to coordinate actions on both the national and state level, threaten to undercut the progress made.
In 2017, it was reported that the rate of unlicensed software installation in the country was 56% in 2017 (below the 57% rate of the Asian Pacific countries), for an estimated commercial value of USD 2,474 million. The value of losses from piracy of music and movies in 2020 was reported to be about USD 4 billion per year, while the commercial value of unlicensed software used in India was approximately USD 3 billion.
In 2017, it was reported that the rate of unlicensed software installation in the country was 56% in 2017 (below the 57% rate of the Asian Pacific countries), for an estimated commercial value of USD 2,474 million. The value of losses from piracy of music and movies in 2020 was reported to be about USD 4 billion per year, while the commercial value of unlicensed software used in India was approximately USD 3 billion.
Coverage Horizontal
INDIA
Since June 1957, entry into force in January 1958, last amended in August 2021
Pillar Intellectual Property Rights (IPRs) |
Sub-pillar Copyright law with clear exceptions
The Copyright Act, 1957 (Act No. 14 of 1957, as amended up to Act No. 33 of 2021)
The Copyright Act, 1957 provides a clear regime of copyright exceptions that follows the fair dealing model, which enable the lawful use of copyrighted work by others without obtaining permission. According to Art. 52(1), a fair dealing with any work (not being a computer programme) for the purposes of private or personal use, criticism or review and the reporting of current events and current affairs does not constitute an infringement of copyright.
Coverage Internet intermediaries
INDIA
Since September 1970, as amended in March 2005
Since May 2004, entry into force in May 2003, last amended in January 2013
Since May 2004, entry into force in May 2003, last amended in January 2013
Pillar Intellectual Property Rights (IPRs) |
Sub-pillar Practical or legal restrictions related to the application process for patents
Patents Act, 1970 (Act No. 39 of 1970, as amended up to Act No. 15 of 2005)
Patents Rules, 2003 (as amended up to Patents (Amendment) Rules, 2012)
Patents Rules, 2003 (as amended up to Patents (Amendment) Rules, 2012)
In 2002, the foreign filing license requirement was introduced in the Indian Patents Act of 1970. This requirement provides that any inventor who is a resident of India should file a patent application for his/her own invention first in India. Only after a period of six weeks after the date of filing of the patent application, the filing can be extended internationally. Alternatively, the inventor is required to obtain the controller’s permission for filing the patent application outside India. However, given that the process is reported as burdensome, filing an application first in India is the preferred way of complying with these provisions. The violation of such rule results in criminal liability under Section 118 of the Indian Patent Act of 1970, with consequent monetary fine or imprisonment up to two years, in addition to the impossibility to proceed with the patent application.
Coverage Horizontal
INDIA
Reported in 2019, 2022
Pillar Intellectual Property Rights (IPRs) |
Sub-pillar Practical or legal restrictions related to the enforcement of patents
Practical restrictions related to the enforcement of patents
It is reported that the potential threat of patent revocations, lack of presumption of patent validity, and the narrow patentability criteria under the India Patents Act impact companies across different sectors. In addition, it has been reported that courts take a significant amount of time to make a final decision in a patent case. A patent lawsuit ordinarily takes approximately five to seven years to be finally decided after trial, if contested by the other party. The Commercial Courts Act is helping to speed up the process with case management hearings and time-bound trials. However, the backlog of cases at the court and the shortage of judicial officers have an impact on the time it takes for a final decision on a case.
Coverage Horizontal
Sources
- https://ustr.gov/sites/default/files/2022%20National%20Trade%20Estimate%20Report%20on%20Foreign%20Trade%20Barriers.pdf
- https://www.managingip.com/article/2a5bsc7vmakvohn4kh3i8/india-challenges-faced-in-the-protection-and-enforcement-of-patent-rights
- https://www.lexology.com/library/detail.aspx?g=305df178-be4a-440d-8120-a64adc85b2bf
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INDIA
Since December 1988
Pillar Intellectual Property Rights (IPRs) |
Sub-pillar Participation in the Patent Cooperation Treaty
Patent Cooperation Treaty
India is a party to the Patent Cooperation Treaty (PCT).
Coverage Horizontal
INDIA
Since September 1970, as amended in March 2005
Since May 2004, entry into force in May 2003, last amended in January 2013
Since May 2004, entry into force in May 2003, last amended in January 2013
Pillar Intellectual Property Rights (IPRs) |
Sub-pillar Practical or legal restrictions related to the application process for patents
Patents Act, 1970 (Act No. 39 of 1970, as amended up to Act No. 15 of 2005)
Patents Rules, 2003 (as amended up to Patents (Amendment) Rules, 2012)
Patents Rules, 2003 (as amended up to Patents (Amendment) Rules, 2012)
According to the Patent Act, 1970 (Act No. 39 of 1970, as amended up to Act No. 15 of 2005) and the Patents Rules, 2003 (as amended up to Patents (Amendment) Rules, 2012), applications for copyright, trademark and patents can be filed online, however, design applications can only be filed in person. Moreover, applicants that do not have a registered place of business in India are required to file applications through an Indian attorney or agent.
Coverage Horizontal
INDIA
Since April 2014, last amended in October 2020
Pillar Foreign Direct Investment (FDI) in sectors relevant to digital trade |
Sub-pillar Screening of investment and acquisitions
Consolidated Foreign Direct Investment (FDI) Policy Circular 2014
Consolidated Foreign Direct Investment (FDI) Policy Circular 2020
Consolidated Foreign Direct Investment (FDI) Policy Circular 2020
According to Art. 6.2.15 of Chapter 6 of the 2014 Consolidated Foreign Direct Investment (FDI) Policy Circular, full foreign direct ownership is permitted in the telecommunications sector (including Category-I Telecommunications Infrastructure Providers). However, a government approval is required for FDI above 49%. This approval is also required for other regulated sectors, including FM broadcasting, up-linking of news through digital media and TV, newspapers and magazines.
Coverage Telecommunications sector and news
INDIA
Since April 2014, last amended in October 2020
Pillar Foreign Direct Investment (FDI) in sectors relevant to digital trade |
Sub-pillar Screening of investment and acquisitions
Consolidated Foreign Direct Investment (FDI) Policy Circular 2014
Consolidated Foreign Direct Investment (FDI) Policy Circular 2020
Consolidated Foreign Direct Investment (FDI) Policy Circular 2020
The Foreign Direct Investment Policy Circular stipulates the screening of foreign ownership above 49% in single-brand retailing e-commerce entities that have both physical and digital stores (single-brand retailing in e-commerce form is only allowed when the entity also owns physical stores in India).
Coverage E-commerce in food products
INDIA
Since November 2015
Pillar Foreign Direct Investment (FDI) in sectors relevant to digital trade |
Sub-pillar Nationality/residency requirement for directors or managers
Press Note. 12 (2015 Series)
Indian brands should be owned and controlled resident Indian citizens and/or companies which are owned and controlled by resident Indian citizens. The term 'Indian brands' is not defined. A company is considered as 'owned' by resident Indian citizens if more than 50% of the capital is beneficially owned by resident Indian citizens and/or companies, which are ultimately owned and controlled by resident Indian citizens. The term 'control' includes the right to appoint a majority of directors or to control the management of policy decisions.
With respect to single brand retail (SBRT), local sourcing norms are prescribed which mandate that SBRT where FDI is greater than 51% are required to source 30% of the value of goods purchased by them from India (preferably from Indian MSMEs, village and cottage industries, artisans and craftsmen). In 2019, it was clarified that this local sourcing requirement of 30% is also met when the foreign retailer (operating as an SBRT in India) sources from India for its exports. Prior to 2019, only a SBRT with a physical store could undertake retail trading through e-commerce. In 2019, it was held that an SBRT company can undertake retail trading through e-commerce prior to opening a physical store, subject to the condition that the entity opens the physical stores within 2 years from the date of the start of online retail. This has allowed companies like Apple to open online stores in India, without a physical store.
With respect to single brand retail (SBRT), local sourcing norms are prescribed which mandate that SBRT where FDI is greater than 51% are required to source 30% of the value of goods purchased by them from India (preferably from Indian MSMEs, village and cottage industries, artisans and craftsmen). In 2019, it was clarified that this local sourcing requirement of 30% is also met when the foreign retailer (operating as an SBRT in India) sources from India for its exports. Prior to 2019, only a SBRT with a physical store could undertake retail trading through e-commerce. In 2019, it was held that an SBRT company can undertake retail trading through e-commerce prior to opening a physical store, subject to the condition that the entity opens the physical stores within 2 years from the date of the start of online retail. This has allowed companies like Apple to open online stores in India, without a physical store.
Coverage Single-brand retail
INDIA
Since October 2020
Since April 2020
Since April 2020
Pillar Foreign Direct Investment (FDI) in sectors relevant to digital trade |
Sub-pillar Screening of investment and acquisitions
Consolidated Foreign Direct Investment (FDI) Policy Circular 2020
Press Note No. 3, 2020 (Review of Foreign Direct Investment (FDI) policy for curbing opportunistic takeovers/acquisitions of Indian companies due to the current COVID-19 pandemic)
Press Note No. 3, 2020 (Review of Foreign Direct Investment (FDI) policy for curbing opportunistic takeovers/acquisitions of Indian companies due to the current COVID-19 pandemic)
According to paragraph 3.1.1 of the FDI Policy, 2020 a non-resident can invest in India subject to the conditions set out in the FDI policy, except in those sectors/activities which are prohibited. However, a citizen of Bangladesh or Pakistan can only invest pursuant to government approval.
In April 2020, the Ministry of Commerce and Industry issued the Review of Foreign Direct Investment (FDI) policy for curbing opportunistic takeovers/acquisitions of Indian companies due to the current COVID-19 pandemic (Press Note. 3). As per the Press Note an entity of a country which shares a land border with India or where the beneficial owner of an investment into India is situated in such a country, government approval would be required. Additionally, it is provided that in the event of any direct or indirect transfer of ownership of any existing or future FDI in India such that there is a change in beneficial ownership which falls within the purview of the circumstances envisaged in the Press Note, such subsequent change in beneficial ownership will also require governmental approval.
The aforesaid change in the law was primarily targeted at China, in light of border tensions between India and China. Since the introduction of Press Note No. 3, as many as 150 private equity/venture capital investment approvals from China and Hong Kong are pending with the government.
In April 2020, the Ministry of Commerce and Industry issued the Review of Foreign Direct Investment (FDI) policy for curbing opportunistic takeovers/acquisitions of Indian companies due to the current COVID-19 pandemic (Press Note. 3). As per the Press Note an entity of a country which shares a land border with India or where the beneficial owner of an investment into India is situated in such a country, government approval would be required. Additionally, it is provided that in the event of any direct or indirect transfer of ownership of any existing or future FDI in India such that there is a change in beneficial ownership which falls within the purview of the circumstances envisaged in the Press Note, such subsequent change in beneficial ownership will also require governmental approval.
The aforesaid change in the law was primarily targeted at China, in light of border tensions between India and China. Since the introduction of Press Note No. 3, as many as 150 private equity/venture capital investment approvals from China and Hong Kong are pending with the government.
Coverage Investments from Bangladesh, Pakistan and China
INDIA
Since April 2013
Pillar Foreign Direct Investment (FDI) in sectors relevant to digital trade |
Sub-pillar Nationality/residency requirement for directors or managers
Consolidated Foreign Direct Investment (FDI) Policy Circular 2013
For broadcasting services, it is mandatorily required that the majority of the directors of the company shall be Indian citizens and the CEO and the chief officer-in-charge of technical network operations and the chief security officer should be resident Indian citizens. The officers/officials of the licensee companies dealing with interception of services must be Indian citizens.
Coverage Broadcasting Carriage Services (teleports, direct-to-home, cable networks, mobile TV, headend in the sky broadcasting services)
INDIA
Since August 2013
Pillar Foreign Direct Investment (FDI) in sectors relevant to digital trade |
Sub-pillar Nationality/residency requirement for directors or managers
Companies Act, 2013
India applies a residency requirement for the members of the board of directors. Art. 149(3) of the 2013 Companies Act requires every company to have at least one director who has stayed in India for a total period of not less than 182 days in the previous calendar year.
Coverage Horizontal
INDIA
N/A
Pillar Public procurement of ICT goods and online services |
Sub-pillar Signatory of the WTO Agreement on Government Procurement (GPA)
Lack of participation in the WTO Agreement on Government Procurement (GPA)
India is not a party to the World Trade Organization (WTO) Agreement on Government Procurement (GPA). However, the country has been an observer of the agreement since 2010.
Coverage Horizontal
INDIA
Since June 2016
Since August 2017
Since October 2020
Since August 2017
Since October 2020
Pillar Foreign Direct Investment (FDI) in sectors relevant to digital trade |
Sub-pillar Maximum foreign equity share
Consolidated Foreign Direct Investment (FDI) Policy Circular of 2016
Consolidated Foreign Direct Investment (FDI) Policy Circular of 2017
Consolidated Foreign Direct Investment (FDI) Policy Circular of 2020
Consolidated Foreign Direct Investment (FDI) Policy Circular of 2017
Consolidated Foreign Direct Investment (FDI) Policy Circular of 2020
According to the Consolidated FDI Policy Circular of 2016 and 2017, India permits up to 100 percent Foreign Direct Investment (FDI) in business-to-business (“marketplace-based”) electronic commerce, i.e. "providing an information technology platform by an e-commerce entity on a digital & electronic network to act as a facilitator between buyer and seller." However, India prohibits foreign investment in business-to-consumer (or “inventory-based”) electronic commerce, also defined as "e-commerce activity where the inventory of goods and services is owned by e-commerce entity and is sold to the consumers directly".
When a marketplace e-commerce entity exercises ownership or control over the inventory, the business is categorized into the inventory-based model. Additionally, India implemented regulations that expressly prohibit subsidiaries of foreign-owned marketplace-based electronic commerce sites from selling products on their parent companies’ sites. The rules also prohibit exclusivity arrangements by which electronic commerce retailers can offer a product on an exclusive basis.
The only exceptions for FDI in inventory-based electronic commerce are for food-product retailing and single-brand retailers that meet certain conditions, including the operation of physical stores in India. According to the Consolidated FDI Policy Circular of 2020, retail trading through e-commerce can also be undertaken before opening physical stores, subject to the entity opening physical stores within two years from the start of online retail. Overall, it is reported that these narrow exceptions limit the ability of many electronic commerce service suppliers to serve the Indian market.
When a marketplace e-commerce entity exercises ownership or control over the inventory, the business is categorized into the inventory-based model. Additionally, India implemented regulations that expressly prohibit subsidiaries of foreign-owned marketplace-based electronic commerce sites from selling products on their parent companies’ sites. The rules also prohibit exclusivity arrangements by which electronic commerce retailers can offer a product on an exclusive basis.
The only exceptions for FDI in inventory-based electronic commerce are for food-product retailing and single-brand retailers that meet certain conditions, including the operation of physical stores in India. According to the Consolidated FDI Policy Circular of 2020, retail trading through e-commerce can also be undertaken before opening physical stores, subject to the entity opening physical stores within two years from the start of online retail. Overall, it is reported that these narrow exceptions limit the ability of many electronic commerce service suppliers to serve the Indian market.
Coverage E-commerce (B2C)
Sources
- https://dpiit.gov.in/sites/default/files/FDI_Circular_2016%281%29.pdf
- https://dpiit.gov.in/sites/default/files/CFPC_2017_FINAL_RELEASED_28.8.17.pdf
- https://dpiit.gov.in/sites/default/files/FDI-PolicyCircular-2020-29October2020_0.pdf
- https://ustr.gov/sites/default/files/2022%20National%20Trade%20Estimate%20Report%20on%20Foreign%20Trade%20Barriers.pdf
- https://sim.oecd.org/Simulator.ashx?lang=En&ds=DGSTRI&d1c=all&d2c=ind
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INDIA
Since February 2015
Pillar Public procurement of ICT goods and online services |
Sub-pillar Other limitations on foreign participation in public procurement
E-mail Policy of the Government of India
According to the E-mail Policy of the Government of India, Government employees may only use governmental email services for official communications, and cannot provide details of their governmental email account to private email service providers.
Coverage E-mail Services