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PhRMA argues that India’s actions, if unchecked, eventually may result in U.S. companies not doing business there. A major drug company’s intellectual property, Mr. Taylor said, must be honored and protected in foreign countries.

“It’s a huge cost to the [drug] companies — over $1 billion per product due to all the failures in the process — and it’s intellectual property rights that protect the product,” he said. “If India is allowed to get away with these activities, are other, larger trading partners going to seek to emulate India’s behavior?”

Top U.S. officials — including Vice President Joseph R. Biden — have raised concerns in recent months, but little has changed.

Since the summer, the American business community has turned up the heat on India and is putting even more pressure on the Obama administration to deal with the problem.

“This concern has been accelerating as we’ve seen more discriminatory and unfair actions by the Indian government that really are designed to help a few Indian companies at the expense of everyone else,” Linda Dempsey, vice president of international economic affairs with the National Association of Manufacturers, said in a conference call with reporters Thursday.

Ms. Dempsey co-chairman of the Alliance for Fair Trade with India, formed in June. Mark Elliot, executive vice president of international economic affairs at the U.S. Chamber of Commerce’s Global Intellectual Property Center, serves as the other co-chairman.

“We have asked the president to raise these concerns, to ask India to level the playing field and treat our manufacturers and businesses fairly,” Ms. Dempsey said. “We’re really counting on the president to make these points and come up with a solution where India returns to policies of [trade] reform.”

India’s approach, while lucrative for some of its big businesses, may end up doing more harm than good to its people and its overall economy. It’s already becoming clear that foreign investment is beginning to dry up.

In 2011 and 2012, $35.1 billion of “foreign direct investment” flowed into India; by 2013, that number dropped dramatically to $22.4 billion, according to India’s Department of Industrial Policy and Promotion.

Furthermore, PhRMA points out that the generic form of Nexavar is sold for $178 per month, making it far too expensive for the vast majority of the Indian population.

“It’s bad for India,” Mr. Elliot said.