The agriculture ministry has capped the so called trait royalties at IRs 49 ($0.73) per 450 gram pack of Bt cotton seeds, which is a 70% reduction from existing. MMB has previously charged licensees around IRs 163 for each packet. The ministry has also affixed the maximum sale price at IRs 800.

MMB, the joint venture licenses Monsanto technology to seed companies upon contract for trait fees. It has cautioned on March 4 to reevaluate every aspects of its business in India subject to substantial cut to royalties by the government. Such intervention will override MMB contracts with seed companies while undermining its operations, reports Bloomberg.

The joint venture, also known as Maharashtra Hybrid Seeds Co., has first introduced cotton plants capable of secreting bug-killing proteins in 2002. Around 97% of Indian cotton fields now prefer biotech plants. MMB provides pest-resistant genes to about 50 cotton seed companies in return for royalty payments.

In another development, the Competition Commission of India, the anti trust regulator, has expressed doubts on possible abuse of dominant position in the country during last month. The commission has instructed its director general to complete a probe by two months.

Average per hectare production of cotton in India has jumped 70% to 503 kilograms since farmers started to use gene modified seeds in 2002. However, production may be dropped 7.4% during 2015-2016 due to shortage of monsoon rain and attack of pests in northern states.