India’s intellectual property (IP) protection rules and enforcement levels have once again failed to impress the Office of the United States Trade Representative (USTR).

The agency’s 2026 Special 301 Report, released on April 30, retains India on the “Priority Watch List”, a category reserved for countries that are supposedly posing serious challenges for US-based companies in protecting their business interests due to concerns of counterfeiting, copyright piracy, patent infringement, etc. The annual assessment of USTR covers over 100 countries with which the US has trade relations, though only 26 countries have been specificall0y named in the 2026 Special 301 Report. While Chile, China, Indonesia, Russia, and Venezuela are also in the same category as India this year, most of the others mentioned, including the EU, Canada, and Pakistan, are in the “Watch List”, suggesting that they have a somewhat higher level of IP protection in the eyes of USTR as compared to India.

Should India treat the annual IP progress card issued by USTR based on unilaterally decided performance yardsticks seriously?

Well, the provisions of the Special 301 statute direct the USTR to develop action plans for each country identified as a Priority Watch List country that has also been on the Priority Watch List for at least one year. The Special 301 Report does talk about a number of measures it ‘encourages’ India to take. With India-US Free Trade Agreement (FTA) talks in progress between the two countries, the concerns raised by America will have to be looked at as most of these suggestions could appear as pre-conditions for the successful conclusion of a mega bilateral economic partnership agreement.

What are those concerns?

USTR states that India remains one of the world’s most challenging major economies with respect to the protection and enforcement of IP as there continues to be a lack of progress on many long-standing IP concerns raised in earlier Special 301 Reports.

Patent enforcement is one such issue. USTR says the potential threat of patent revocations and the procedural and discretionary invocation of patentability criteria under the Indian Patents Act impacts companies across different sectors, and has led to significant application delays and rejections. It also points out those patent applicants generally continue to confront long waiting periods to receive patent grants, excessive reporting requirements, etc. 

Trademark counterfeiting and piracy is another problem highlighted by USTR.

“India remains home to several markets that facilitate counterfeiting and piracy, as identified in the 2025 Review of Notorious Markets for Counterfeiting and Piracy (Notorious Markets List). While some of India’s state authorities continue to operate dedicated and effective IP crime enforcement units, similar organisations are mostly absent in other states,” the report says.

According to USTR, copyright holders continue to report high levels of piracy, particularly online. “Despite India’s commitment at the United States-India Trade Policy Forums (TPF) in November 2021, January 2023, and January 2024 to comply with the World Intellectual Property Organization (WIPO) Performances and Phonograms Treaty (WPPT) and WIPO Copyright Treaty (WCT), collectively known as the WIPO Internet Treaties, to which India acceded in 2018, amendments to the Indian Copyright Act are still needed to fully implement the WIPO Internet Treaties and bring India’s domestic legislation into alignment with international best practices, including with respect to technological protection measures and right management information”, the report said. Unauthorised file sharing of video games, signal theft by cable operators, commercial-scale photocopying and unauthorised reprints of academic books, and circumvention of technological protection measures, etc., have been highlighted as continuing problems.

The US wants India to take necessary additional steps, including authorising collective management organisations to collect for the use of sound recordings and performances so that royalties can flow to producers and performers, respectively.

Incidentally, a good number of problems identified by the USTR are considered as issues that merit strict action by India too. As USTR itself acknowledges, the central government continues to amend existing laws and enact new rules to strengthen IP enforcement in the country. Given the size of the country and varying levels of institutional capacities of State governments, complaints continue. The Special 301 Report can serve as an annual reminder to speed up reforms and changes that India wants to bring about. To that extent, the report deserves attention.