Competition Commission of India to look into Monsanto Joint Venture deal
Feb 19, 2016 07:14 AM EST
The anti-monopoly watchdog that looks into irregularities with government transaction known as Competition Commission of India is investigating the Monsanto joint venture. This comes after allegations of the company regarding the use of its dominance as a major supplier of genetically modified cotton seeds have surfaced.
An affiliate of Prime Minister Narendra Modi's ruling party has alleged Monsanto of overpricing its products and using its position as the major supplier of cotton seeds in the country.
During 2002, the US-based seed supplier launched the genetically modified cotton seed in India. Despite opposition from critics regarding its safety, it has made India the top producer of cotton in the world and the second largest exporter of fiber, as per Reuters.
According to Business World, Mahyco Monsanto Biotech (India) (MMB), in collaboration with India's Mahyco, licenses a gene that manufactures its own pesticide to a number of local seed companies in exchange of royalties and an upfront payment. MMB also markets the seeds directly, it worked with local licensees and took charged of the ninety percent shares of the market
The case started after the Indian authorities allowed the first genetically modified crops to be grown in the country. Despite the promises of a high yielding crop, it basically divided the public's opinion.
Because of these issues, the Competition Commission of India conducted an investigation and found out that there are clear indications that Monsanto abused its dominance. The commission then asked the director general to conduct further investigation regarding the issue and should yield results after 2 months.
Monsanto is now facing charges of creating sub-license agreements, charging unfair price, discriminatory treatment, limiting and restricting the scientific and technical development of cotton seeds market and cotton technology, denial of access to markets and using it dominance in the cotton seed market to protect its own interest, as reported by The Economic Times.
Monsanto is now evaluating the accusations, although it is confident the commission will find them innocent. It added that they are conducting their business in an honest, transparent and respectful manner. It has also assured the commission that it will cooperate in any way when the investigation starts.