NEW DELHI: India needs to modify its Intellectual Property Rights (IPR) regime and fast-track legal system to attract foreign investments, a report said today. "India must sort out some contours of its IPR regime. The legal system must be fast-tracked and the use of compulsory licensing (CL) for essential pharmaceutical drugs must be the exception and not the norm," it suggested. The report has been released by the Europe India Chamber of Commerce (EICC) and European Business and Technology Centre (EBTC) in co-operation with the European Business Group.
"Many EU companies find out that the actual market scenario in India is distinctly different from their original understanding." Reforms also need to be initiated in trade facilitation and export promotion, it added. "Companies that invest in India need to have lot of patience and deep pockets to sustain cash flow uncertainties. They should focus on the potential and not the short-term challenges," EICC's Research Head Adith Charlie said.
Further, it claimed said that European companies had spent $198 billion in India during the last 10 years. "In the same period, Japanese and U.S. firms channelized $138 billion and $50.7 billion respectively into their India units. This gives EU enterprises the distinction of being the largest inbound investor into India," it said. EU firms have spent $118 billion on 2,566 Greenfield (new) projects and also acquired interests in 1,442 companies for $80 billion.
"Tactical Greenfield investments, landmark acquisitions and steadfast dedication through uncertain economic cycles have been the key ingredients of the success enjoyed by European companies in India," it said quoting EICC Secretary General Sunil Prasad. The study found that despite the challenges facing the Indian economy, EU firms are optimistic about the next 5 years. "The common consensus is that the next government would usher in a fresh round of growth," Prasad added. The report titled 'European Companies in India: Reigniting Economic Growth', said that EU companies collectively provide direct employment to 1.5 million Indians.