U.S. biotechnology company, Monsanto is frustrated with India's treatment of foreign companies making business in India. The country is still not ready for commercial cultivation despite the fact that Genetically modified organisms, or GMOs, grow in an estimated 97 percent of India's cotton fields and have helped India by some measures become the fiber's top global producer. Instead of giving Monsanto a premium for developing its cotton industry, the Indian government makes it hard for foreign biotech companies.
As a sustainable agriculture company, Monsanto delivers agricultural products that support farmers all around the world. Monsanto's biotechnology paved the way for India's cotton industry with the introduction in 2002 of genetically modified, pest-resistant cotton seeds where the same is now sold to 7 million farmers in India.
The conflict between Monsanto and the Indian government stemmed following the recent slashing the royalties paid to Monsanto's local joint venture, Mahyco Monsanto Biotech, by 70 percent by Prime Minister Narendra Modi's administration. This fuelled the tension even more because according to Shilpa Divekar Nirula, chief executive of Monsanto India, Monsanto would not bring new generation seeds to India if a price cut were enforced.
Nirula added that it's difficult 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 and where the sanctity of contracts is absent. She was referring to the dispute with Indian authorities over royalties for its technology that's crippling the biotech industry, especially so that India cultivates the world's largest cotton-growing area, yet produced among the fewest bales per acre. India is still very conservative when it comes to agricultural cultivation; commercial cultivation is frowned upon. At the same time, the system in place are still traditional and the government says that it welcomes foreign investors and companies, it actually does the other thing in making it hard for the foreign biotech industries to do business in India.
