Price controls and compulsory licensing guidelines, as enacted in case of Bt Cottonseed, are likely to have an adverse impact on the long-term growth of the Genetically Modified (GM) seeds industry, ICRA said in a report.

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ICRA opined that while the Cottonseed Price (Control) Order, 2015, aims to notify the maximum selling price for Bt Cottonseed along with the trait-value, the Licensing and Formats for GM Technology Agreement Guidelines, 2016, if implemented, require the technology providers to compulsorily give license to all applicants.

These steps are likely to have an adverse impact on the technology providers, it pointed out.

This, at a time when the roll-out of more GM crops has been slow, would hamper the adoption of GM crops in the country, it added.

"While the current situation of financial stress on cotton farmers may justify some intervention on part of the government, a more conducive regulatory environment is critical for the long-term growth of the GM seeds," ICRA AVP, Corporate Sector ratings, Harsh Jagnani said.

India embraced its first GM crop in 2002 with the commercialisation of Bt Cottonseed developed by Mahyco Monsanto Biotech (India).

Bt Cotton now covers 95% of total area devoted to cotton.

However, no other GM crop has been approved since then, notwithstanding the roll-out of field trials to assess the bio-safety of GM crops in 2009.

ICRA said, at such time, controlling the GM seeds licensing of technology providers may further restrict research and development of GM crops in the country.

India with its fairly low seed replacement ratio and a higher proportion of extant varieties in its commercial seed portfolio can ill-afford to lower the research spends, it added.

Going forward, ICRA said, growth lies in promoting research for development of GM seeds for new crops both by public and private technology providers and according timely approvals for commercialisation of new varieties.

ICRA believes that expanding the pool of GM crops and allowing more technology providers to operate could create healthy competition in the market and lead to fair pricing of license fees such as Trait Fee on the basis of market forces, thereby alleviating the primary concern of the policymakers from GM seeds.

"Institutional structure governing agricultural research and policy and bio-safety framework plays an important role in advancing the implementation of GM technology," Jagnani added.

Jagnani further said aspects like state-level approvals for field trials and delays in commercialisation of GM products are limiting factors for the growth of the sector.