updated 12/27/2004 11:16:27 PM ET 2004-12-28T04:16:27

India brought into effect key changes to its patent law on Monday to cover a range of products from drugs and chemicals to mobile phone and computer software, in line with commitments to the World Trade Organization.

Commerce and Industry Minister Kamal Nath said the amendment to the patent law was made through a presidential decree issued on Sunday, and played down fears of a spike in drug prices.

The decree signals a breakthrough in patent reform, which had been stalled by concerns raised by communist allies of the ruling coalition and opposition parties, who wanted adequate safeguards to maintain price stability of life-saving medicines.

“The fear that prices of medicines will spiral is unfounded,” Nath told a news conference. “In the first place, we must realize the fact that 97 percent of all drugs manufactured in India are off patent and so will remain unaffected.”

India currently has patents for processes but not for products. It must implement them by Jan. 1, 2005, under WTO commitments.

Many multinationals have in the past said their intellectual property is at risk in developing countries where there is little or no legal protection offered.

Nath said he was confident of securing parliament’s approval for the patent amendments in the budget session of parliament in February. Under Indian law, the presidential decree has to be approved by parliament.

India’s communist parties, who lend crucial support to the Congress-led administration, and other political parties fear that firms holding product patents for life-saving drugs will increase their prices once the new laws come into force.

The government was scheduled to introduce legislation to change patent laws in the winter session of parliament which has just concluded but failed to do so due to political differences.

The change in India’s patent law will spur domestic drug companies to look aggressively at new drug research themselves.

By implementing the legal changes, Indian drug companies will be eligible to make generic drugs for booming export markets, where drugs worth billions of dollars are set to go off patent in the next few years, the minister said.

“Indian industry can grab a lion’s share of this provided we are a bonafide member of the international trading community and are not in a questionable position, open to the possibility of retaliatory measures and sanctions,” Nath told reporters.

“By participating in the international system of intellectual property protection, India unlocks for herself vast opportunities in both exports, as well as her potential to become a global hub in the area of research and development,” Nath added.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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