The U.S. may include India in the "Priority Foreign Country" list for intellectual property rights, according to the Press Trust of India. The U.S. industry and trade lobbies are pushing for India to be added to this list, which compiles those countries that have significant intellectual property protection issues. A Priority Foreign Country is the worst classification under the U.S. Trade Act, and denotes a nation with no adequate protection of intellectual property rights or equitable market access to U.S. companies. Inclusion on this list leads to trade sanctions.

Officials in Delhi assert the demand that India be included on this list is misguided, as India's intellectual property regulations are consistent with global norms, including those of the World Trade Organization.

"If the U.S. does that, then India probably will have no option but drag them to the WTO's dispute settlement mechanism," an Indian official told the Press Trust. "The country's IPR laws are fully compliant with WTO. If America has any issue with our laws, they can raise that in the WTO."

Brook K. Baker, a professor at the Northeastern University School of Law in Boston, told Asian Age such sanctions could significantly impact India's pharmaceutical industry, among other vital sectors of its economy.