Biotech Updates

ICRA: Pricing Controls and Compulsory Licensing of Bt Cotton Cloud the Long-term Growth of GM Seeds Industry

June 15, 2016

India's Investment Information and Credit Rating Agency (ICRA) expects that pricing controls and compulsory licensing guidelines for Bt cotton would cloud the long-term growth of the biotech seeds industry in the country. This was stated in ICRA's latest release on Seeds Sector: Update on Trends and Outlook.

India is one of the earliest adoptors of GM technology, however, it has only allowed planting of Bt cotton. In 2015, Bt cotton is planted to 95% of the total land area devoted to cotton. The government of India decided to regulate the cottonseed prices by introducing the Cottonseed Price (Control) Order 2015 to set the Bt cottonseed prices and trait fees. Furthermore, in May 2016, the government tightened the control on Bt cotton by nullifying all the active license agreements between trait providers and seed companies. It laid down new norms for licensing which entitles any seed company to market the product by paying a mandated trait fee, which is much lower than the prevailing trait fee as per the licensing arrangement. At present, such order was turned into a draft notification for public consultation.

With the current happenings, ICRA believes that price controls such as in the nature of Cottonseed Price (Control) Order of 2015 could adversely impact the long-term growth of the GM seeds industry. ICRA recommends research and development of new GM crops by public and private technology providers, which can lead to healthy competition in the market and fair prices.

Read more from ICRA.