Monsanto India shares slumped nearly 10 per cent on Monday following the government's decision to tighten rules for the sale of genetically-modified cotton seeds in the country.
The new rule will cap royalties for any new variety that the market's sole supplier - US-based Monsanto Co - decides to develop and sell.
Now, if Monsanto decides to introduce any new, advanced variety of its genetically modified (GM) cotton, the world's biggest seed company cannot charge royalties more than 10 per cent of the price of seeds, fixed at Rs 800, for five years from the date of commercialisation, according to the government's ruling.
Earlier in March, the Agriculture Ministry had cut royalties that local seed firms pay to Mahyco Monsanto Biotech (India) (MMB), a Monsanto joint venture with India's Mahyco; the government also capped GM cotton seed prices at Rs 800 for a packet of 450 grammes.
Davor Pisk, chief operating officer of Swiss agribusiness giant Syngenta, told NDTV Profit that the new rules will hinder new technology coming into India. (Watch)
Monsanto India shares closed 8.75 per cent lower at Rs 2,071, underperforming the broader Nifty, which closed 0.24 per cent lower.
(With inputs from Reuters)