The Supreme Court has denied a patent to Swiss giant Novartis AG's cancer treatment Glivec.
The ruling was being closely watched by global drugmakers who have been battered by recent intellectual property decisions in India.
Novartis has been fighting since 2006 to win a patent for Glivec, which many oncologists view as a major advance in treating chronic myeloid leukaemia, which kills 80-90 percent of sufferers, and some gastrointestinal cancers.
India has refused protection for Glivec on the grounds that it is not a new medicine but an amended version of a known compound - a decision consistent with domestic patent law which sets tight restrictions on multiple patents for a drug.
By contrast, in the United States, amended versions can be patented.
Novartis was seeking to overturn a clause in Indian Patents Law that restricts patent protection for newer forms of existing molecules, and next week's ruling could set a precedent for how other similar patent claims are treated.
(With inputs from Reuters)
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