13:31 GMT13 August 2020
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    The Indian government's decision comes at a time when the country's cotton output is falling and needs a breakthrough to help reinstate its leading position on the global cotton market.

    New Delhi (Sputnik) — For the third time in four years, India's Ministry of Agriculture has curtailed the trait value (royalty) paid to German drugmaker Bayer AG Monsanto for genetically modified cotton seeds. 

    READ MORE: Monsanto Accused of Causing Loss to Cotton Farmers in India

    "Prime Minister Narendra Modi's government has decided to reduce royalties paid by Indian seed companies to Monsanto for its genetically modified (GM) cotton by 49 percent", The Asian Age reported.

    Experts in the field have however suggested that the decision could prompt foreign seed companies to scale down their investments in India.

    "Such an ad hoc mechanism of price fixation makes the cotton seed business unsustainable in the long run. The reduction in seed price makes little difference to the farmer, as the cost of seed is hardly 5 percent of his revenue. On the other hand, the reduction in sale price from INR 800 to INR 730 per packet over two years will cause a huge cut in the research budgets of seed companies", Ram Kaundinya, director-general of the Federation of Seed Industry of India was quoted as saying by The Indian Express

    After emerging as the world's top cotton producer in 2015-16, India conceded that slot to China in 2018-19. At the current rate, there is a possibility of the country even becoming a net cotton importer again, warned Kaundinya.

    READ MORE: India’s Apex Court Reinstates Monsanto’s Patent Claim Over GM Cotton Seed

    India's agricultural ministry had first cut Monsanto's royalties in 2016, triggering a feud between India-US with the then US ambassador to India Richard Verma approaching Indian Prime Minister's office over the matter.


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    royalties, cotton, patent, farmers, genetic engineering, Monsanto, India, Germany
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