India has axed the royalties that local seed companies pay to German drugmaker Bayer AG for Monsanto’s genetically modified (GM) cotton, a government order said, after cutting them back since 2016.
More than 45 local cotton seed companies pay royalties to Monsanto, acquired by Bayer in 2018, for GM cotton using a gene that produces its own pesticide.
The American company was headquartered in St. Louis before Bayer bought it in a $63 billion deal in 2018 and India’s decision to start reducing the royalties triggered a long-running feud.
The decision could dissuade other foreign seed companies from scaling up their investment in the sector.
New Delhi approved Monsanto’s GM cotton seed trait, the only lab-altered crop allowed in India, in 2003 and an upgraded variety in 2006, helping transform the country into the world’s top producer and second-largest exporter of the fibre.
However, Monsanto became embroiled in a dispute with Indian seed company Nuziveedu Seeds Ltd (NSL), which argued that India’s Patent Act did not allow Monsanto any patent cover for its GM cotton.