Amid mounting tensions between both countries, senior US leaders are arriving here on Monday with several American business heads in an effort to woo Indian industry, even as the threat of the US labelling India as 'Priority Foreign Country' in its 'Special 301 Report' looms large.

US Energy Secretary Ernest Moniz and USAID head of climate change division, Kit Batten, are all coming here this week with several senior US delegates to participate in a US-India dialogue. On Tuesday, the US-India Energy Security Coalition will be launched by Moniz.

On the other hand, Batten is expected to hold meetings with Indian leaders and industry heads and visit key sites.

During the visit, several memoranda of understanding and business deals are expected to be signed between India and the US. However, the business environment between both sides has deteriorated like never before.

Off late, the US National Association of Manufacturers, in coalition with the American pharmaceutical lobby, has been pressurising the US government, especially the Office of US Trade Representative, to label India as a 'Priority Foreign Country', whose intellectual property and patent laws would be closely monitored as they are believed to be major violators.

The US alleges that India has violated the provisions of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement under the World Trade Organization. As a result, the US International Trade Commission (USITC) has launched an investigation against India's trade and industrial policies.

The USITC, which began the probe on February 12, has decided that based on their findings here, it would forward a consolidated report on India's trade and industrial policies to the US Congress, after which, it would take necessary actions against India. The worst case scenario could be to impose trade sanctions on India.

Recently, commerce and industry minister Anand Sharma called the US stance "protectionist" and said that the US was driven by lobbyists who were pushing for TRIPS-plus provisions.

Following the cases of Novartis and Bayer-Onyx, the US is concerned that other emerging economies like Brazil and China might follow India's model of compulsory licensing. In 2012, the Indian patent office issued the first compulsory licence to Indian pharmaceutical company Natco Pharma to make generic versions of Bayer's kidney cancer drug, Nexavar.

Last year, the Supreme Court dismissed Novartis AG's efforts to win patent protection for its cancer drug, Glivec, allowing Indian drug companies to sell its generic versions. However, a compulsory licence application for Bristol-Myers Squibb's Sprycel was rejected.