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Monsanto Threatens to Pull Out of India Over Royalties

Monsanto is threatening to pull out of India if the country follows through with imposing a significant reduction in the royalties that local companies pay for Monsanto’s genetically modified seeds, reports Reuters.

In 2002, through its partnership with India’s Mahyco, Monsanto began selling a GM cotton seed in India, turning the country into the world’s largest producing country and second largest exporting country.

Mahyco Monsanto Biotech (India) (MMB), which is a joint venture between India-based Mahyco and Monsanto, licenses a pesticide producing gene to local seed companies, and also directly markets the seed through local licensees. Both activities combined account for 90% of the market in the country.

After local seed companies complained that MMB was overcharging, the country’s farm ministry created a committee last year tasked with investigating the allegations. Upon the conclusion of its exploration of the charges, the committee has recommended a 70% reduction in royalties paid to MMB. The farm ministry has not yet come to a final decision based on the committee’s recommendation.

In a separate motion, MMB has filed a complaint in a Delhi court claiming that the committee lacks the authority to determine an agreed-upon industry fee.

"If the committee recommends imposing a sharp, mandatory cut in the trait fees paid on Bt-cotton seeds, MMB will have no choice but to re-evaluate every aspect of our position in India," Shilpa Divekar Nirula, Monsanto's chief executive for the India region, said in a statement, reports Reuters. "It is difficult for MMB to justify bringing new technologies into India in an environment where such arbitrary and innovation stifling government interventions make it impossible to recoup research and development investments.”

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