India's antitrust regulator said on Wednesday it suspected that a Monsanto joint venture had abused its dominant position as a supplier of genetically modified (GM) cotton seeds in the country.
Local farmers and some of their associations, including one affiliated to Prime Minister Narendra Modi's ruling party, have complained that Monsanto overprices its products using its position as the supplier of GM seeds used in more than 90 percent of the country's cotton cultivation.
U.S.-based Monsanto launched a GM cotton variety in India in 2002 despite opposition from critics who questioned its safety, transforming the country into the world's top producer and second-largest exporter of the fibre.
Mahyco Monsanto Biotech (India) (MMB), a joint venture with India's Mahyco, licenses a gene that produces its own pesticide to a number of local seed companies in lieu of royalties and an upfront payment. MMB also markets the seeds directly, though the local licensees together command 90 percent of the market.
Acting on a complaint by India's farm ministry that the JV was charging "unreasonably high" royalty fees, the Competition Commission of India (CCI) asked its director general (DG) to complete an investigation into the matter in two months.
"The DG shall also investigate the role of the officials/ persons who at the time of such contravention (of the competition act, if any) were in charge of and responsible for the conduct of their business," the CCI wrote in an order uploaded on its website. (bit.ly/1oJw4Jg)
An MMB spokesman had no immediate comment, but its counsel told the CCI that the royalty charged from Indian seed companies was the lowest in the world, that prices had come down over time and innovation had to be rewarded, according to the order.
A minister involved in the issue told Reuters the government was determined to lower GM cotton prices ahead of a possible launch of GM mustard, final trial reports for which are being examined by experts.
A committee of government and independent experts this month sought more information from a team of Indian scientists who have spent almost a decade on laboratory and field trials for the mustard crop, which could become the country's first transgenic food crop.