Industrial Designs and FDI: India and its Economic Partners

Abstract

India’s trade agreements and policies related to Intellectual Property Rights (IPR) have played catalytic role in attracting huge Foreign Direct Investment (FDI) since early 2000s. FDI plays an important role in facilitating technological support, financial capital, and the creation of technological products through R&D. Under IPR, Industrial Designs (IDs) is an important indicator about the manufacturing and industrial base in an economy. After 2005, India signed the trade agreements like Comprehensive Economic Partnership Agreement (CEPA) and the Comprehensive Economic Cooperation Agreements (CECA) to facilitate technology transfer, investment and further strengthening of the IPR regime. This study analyses the relationship between FDI inflows from selective ten economic partners and its interlinkages with the filings of industrial design applications by them on yearly basis in Indian offices. The time line for impact analysis is between 2005 and 2022. The countries are divided in 2 groups, those under CEPA & CECA and those which are not. The Year Fixed Estimation methodology is used for the study. The independent variables such as GDP per capita, annual inflation rate and labour force participation rate have been included to demonstrate the macro effect. The findings show a positive correlation for those countries which are part of trade agreements. This study is unique in case of India as not many studies are available which highlights the effectiveness of CECA & CEPA in stimulating FDI inflows for strengthening of IPR structure in India. Overall the study also provide a huge scope for India to move from labour-driven manufacturing competitiveness towards the intellectual property driven knowledge competitiveness economy thus encouraging more industrial design applications in India.