India has been placed on the Priority Watch List in a special 301 report along with Argentina, the Bahamas, Brazil, Lebanon, the Philippines, Poland, Russia, and Taiwan. The Priority Watch List entails a greater level of scrutiny than the Watch List for possible future sanctions unless the alleged inadequacy of protection is remedied .

The US Trade Representative's Office (USTR) made the following unflattering comments about us, " India's copyright law, which is generally consistent with international standards, was weakened by amendments enacted in 2000 that undermine protection for computer programmes. Enforcement against piracy remains a growing concern for US copyright industries, especially given that pirated imports are entering the market from Southeast Asia and that there is growing Internet piracy. We will continue to consult with the Indian Government to resolve outstanding TRIPS compliance concerns, but if these consultations do not prove constructive, we will consider all other options available, including WTO dispute settlement, to resolve these concerns."

The list has once again put Ukraine as the number one menace. A Reuters report indicates that the USTR will continue enforcing the $75 million in US sanctions on Ukraine would on account of the country's failure to adopt and enforce adequate protections against the illegal copying of optical media products such as music CDs, movie DVDs and computer software. The sanctions were first imposed last year.

Ukraine is the only country on the Priority Foreign Country list. In addition the dual problems of rampant piracy coupled with lack of enforcement exist in Russia, Taiwan, Poland, Brazil. China and Paraguay remain subject to special monitoring under US trade laws.

The International Intellectual Property Alliance (IIPA), a consortium of publishing, film, software and recording industry groups, estimates that global piracy costs US copyright industries more than $22 billion annually. The 50 countries listed in the USTR annual report accounted for $9.8 billion of those annual losses, the group said.

On the positive side the report notes that implementation of an World Trade Organisation agreement on intellectual property rights had helped to improved protection worldwide. For instance Colombia and Hungary are now protecting confidential medical test data in line with their WTO obligations.