India: Monsanto threatens to exit India over GM royalty row

American agrochemical giant Monsanto has threatened to pull out of India and hold back new genetically modified cotton technologies if the government continues its “arbitrary and potentially destructive” interventions that seek to cut the company’s royalty fees.

Last year the Indian government issued an order to control cotton seed prices effective from the 2016-17 crop year. In a ruling, the antitrust regulator, Competition Commission of India, accused the GMO giant of potentially abusing its dominant position on the market. The Agriculture Ministry set up a special committee tasked with implementing brackets for seed price along with royalty fees, after the completion of an investigation into the matter.

Mahyco Monsanto Biotech (MMB), a joint venture with India’s Mahyco, licenses its products to a number of local seed companies in exchange for royalties. The company also sells seeds directly though the local licensees.

All in all the US subsidiary control some 90 percent of the market, as the agricultural biotechnology corporation serves over seven million cotton farmers in India.

However the new government commission is keen to reduce the price of the crop after local seeds companies filed complaints that MMB was charging high fees to sub-license BT cotton seed technology since 2002. The government is reportedly planning to reduce the royalties of its genetically modified cotton seeds by 70 percent.

Full content: The Wall Street Journal

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