India has decided to block investigations by the United States into its trade policies and patent laws and prepare for a battle at the World Trade Organization (WTO), a move that could escalate already-strained tension between the two countries.
New Delhi is furious about a threat of trade sanctions made by the US Trade Representative's (USTR) office over its protection of intellectual property rights (IPR), preference for domestic producers and non-trade barriers.
Ahead of a general election, Prime Minister Manmohan Singh's government does not want to be seen as bowing to US pressure, amid lingering tension over the recent arrest and strip search of a female diplomat in New York suspected of visa fraud.
On Wednesday, the National Association of Manufacturers (NAM) - which represents about 50 US business groups - asked the USTR to designate India a Priority Foreign Country in its 2014 report.
"This designation appropriately would rank India among the very worst violators of intellectual property rights and establish a process leading to concrete solutions," NAM said in a letter to US Trade Representative Michael Froman.
The USTR is holding public hearings for its annual report due in April. The report will provide details on nations denying protection of IP rights or fair market access to US firms.
