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India’s IP securitisation market is underdeveloped, despite the growing importance of IP as an asset class.
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Legal reforms are needed to establish a transparent process for creating and recording charges over IP assets.
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Financing innovations, such as interest rate subsidies and credit guarantees, can encourage IP financing mechanisms in India.
Intellectual property (IP) securitisation is the practice of transforming IP assets into tradeable securities. However, India’s IP securitisation market is still in its infancy. To strengthen this market, legal reforms are necessary to establish a transparent process for creating and recording charges over IP assets. This will provide comfort to financing institutions and investors.
Currently, Indian IP laws do not provide a uniform mechanism for recording charges over IP assets. For instance, there is no requirement or formal process for recording charges for trademarks and copyrights. To address this, lenders usually obligate IP owners to file letters with the relevant registries, declaring the grant of a security interest.
To encourage IP financing mechanisms in India, the government can consider introducing initiatives such as interest rate subsidies and credit guarantees. Other countries like Singapore and Korea have already introduced such initiatives to boost their IP financing ecosystems. By strengthening IP securitisation, India can unlock the potential of its burgeoning technology, pharmaceutical, and semiconductor sectors.
