Govt suspends its week-old order to rein in GM firms

NEW DELHI: The government has temporarily suspended an order that put stringent clauses on genetically-modified (GM) technology companies, officials said on Tuesday,

NEW DELHI: The government has temporarily suspended an order that put stringent clauses on genetically-modified (GM) technology companies, officials said on Tuesday, after industry concerns over a potential return to licence raj and heavy state control.

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The May 18 order, issued by the farm ministry, brought in a raft of changes in how farm biotech companies, such as US giant Monsanto, can do business in India, sign their contracts and price their products.

GM crops are a sensitive issue in India with several organisations including those affiliated to the Rashtriya Swayamsevak Sangh (RSS), the ruling BJP’s ideological parent, opposing them on grounds of bio-safety and market control by seed firms.

In GM crops, genes are altered for a specific outcome, such as pest-resistance. Till now, BT cotton is the only transgenic crop India hasallowed.“The government has temporarily put the order on hold. We have not withdrawn it but we will now invite suggestions on the order from the public,” a farm ministry official said, requesting not to be quoted because he is not authorised to speak.

Another source said one reason behind the decision is that “the new order could be in violation of India’s legal commitments on intellectual property rights”.

The May 18 order said a GM technology provider — usually MNCs such as Monsanto — cannot charge royalties beyond 10% of the retail price of GM cotton seeds for the first five years. The price of a packet of the top-selling GM cotton seed is ` 800. Beyond the five-year period, royalties go down 10% every year. Apart from pricing controls, the government had also tightened regulations around the business model of GM companies.