In May 1982, at the 34th World Health Assembly in Geneva, Indira Gandhi, India's prime minister said, “The idea of a better ordered world is one in which medical discoveries will be free of patents and there will be no profiteering from life and death.” This sentiment was the dominant consensus of the time, resonating with the general industrial policy and the Patent Act of 1970, which recognized only process patents for medicines. This policy innovation allowed Indian firms to bypass pharmaceutical patents and produce generic versions of medicines. With the transition from GATT to the WTO in the 1990s, the debate over the TRIPS agreement became central to India's international commitments, and a defense of India's autonomy over patents and health policies became contested. In the 1990s, protests against patents animated “mass politics” (parliament, for example) as much as “elite politics,” creating huge political costs for compliance to the patents-based regime. Dr. Hamied, CEO of Cipla, one of the largest Indian companies, declared in 1993, “No change is called for in the Indian Patent Act of 1970 and the sooner our government takes a firm and irrevocable stand on this issue, the better, GATT or no GATT, pressure or no pressure.”

On the other side, US threats of trade sanctions constrained Indian policymakers. Throughout the 1990s Indian policymakers struggled to pass this unpopular law, successfully resisting pressure from the United States and delaying compliance with TRIPS. At this time, domestic politics seemed to triumph global pressures (US pressure) and obligations (WTO). The Indian legislature did not pass any TRIPS-compliant legislation despite repeated attempts by its policymakers. Yet, overturning decades-old consensus in March 2005, India's commerce minister declared, “It suits us to have a modern patent regime in line with what most countries in the world have already adopted, including China and Brazil.” Simultaneously, the government declared India as “[t]he world's knowledge hub of the future.” By 2005, India was in compliance with a globally recognized product patent regime. Why and how did this policy and ideational shift happen so suddenly, despite intense popular and elite opposition?

A related puzzle about private sector responses demands an answer. It is well known that India's postindependence policy regime germinated a strong domestic pharmaceutical sector (Banerji 2000; Chaudhuri 2004, 2005; Felker et al. 1997; Govindraj and Chellaraj 2002; Long 2000; Redwood 1994).