India’s record on intellectual property rights is anything but solid, a major U.S. business group says—and that could become a major factor in diplomatic relations with the country. More details:

A call to action: On Friday, the U.S. Chamber of Commerce called for measures to reprimand India for its trade practices. A recent study by the Chamber’s Global Intellectual Property Center (GIPC) found that India’s practices are among the worst in the developed world. The group asked U.S. Trade Representative Michael Froman to label India as a “Priority Foreign Country”—a nation that has failed to provide “adequate and effective” protection of intellectual property rights, according to the U.S. Trade Act. “We hope that designating India as a Priority Foreign Country will generate a much-needed dialogue and engagement between the U.S. and Indian governments to strengthen the IP environment in India,” the GIPC’s executive vice president, Mark Elliot, told the Press Trust of India wire service last week. On Monday, Froman announced that the U.S. would file a complaint against India with the World Trade Organization over equipment requirements that box U.S. producers out of India’s solar technology market.

“Deteriorated rapidly”: Released last month, the GIPC report showed India dead last among 30 listed countries on trade issues—below Ukraine, the only country currently designated as a Priority Foreign Country by the U.S. government. India ranked near the bottom of the list in every category, including respect of patents, copyrights, and international treaties. In a submission to Froman’s office [PDF], the Chamber of Commerce said that “India’s failure to develop and adhere to international best practices in the field of IP rights has hindered its economic development, especially over the last year when its IP environment deteriorated considerably. The resulting lack of confidence has directly impacted India’s foreign direct investment.” The document particularly noted patent issues regarding green technology and pharmaceuticals, along with poor enforcement of intellectual property law.

The pharmaceuticals issue: The Pharmaceutical Research and Manufacturers of America (PhARMA) is joining the Chamber in calling for India to be designated a Priority Foreign Country, citing drug patents that have been invalidated and the sale of unauthorized generic versions by Indian manufacturers. As Reuters notes, the situation is politically sensitive, as many consumers in India cannot afford full-priced medicine. The GIPC report notes that manufacturers gave the country access to drugs “either free of charge or at a greatly reduced cost,” only to see the patents on the drugs revoked. (A similar conflict over prescription drugs is playing out in South Africa.)

The push by the industry comes at a time of worsening relations between the U.S. and India after the arrest of Devyani Khobragade, a diplomat accused of committing visa fraud and mistreating a domestic worker. Khobragade’s case currently rests on her claim of diplomatic immunity.

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