Post 1960, Indian agriculture—what some could call its green revolution— grew by leaps and bounds, as new technologies were being deployed in a bid to increase production. Its progenitor, Monkombu Swaminathan, at the time asserted that “if agriculture goes wrong, nothing else will have a chance to go right”.
Yet, since 2016, Indian agriculture has taken a turn for the worse. Indian farmers and their government have been caught off guard by a problem they themselves created, mistakenly believing at the time it would be their salvation: allowing agro-multinational firms to take control.
The Rise of Foreign Multinationals in Indian Agriculture
Monsanto entered the Indian market with its 2002 introduction of Bt Cotton, a genetically modified variety engineered to resist the bollworm, the longstanding enemy of cotton farmers. Due to its technological innovation, Monsanto rapidly secured a position of dominance, leveraging its near-total control over the cotton seed market to dictate pricing. By the early 2010s, India had emerged as the world’s largest cotton producer.
Yet, Monsanto’s model proved unsustainable. Unlike traditional seeds, which farmers could save and replant, Bt Cotton seeds were patented, and farmers were required to purchase them every year.
In addition, by the mid-2010s, bollworms had developed a resistance to the Bt Cotton, forcing farmers to resort to pesticides, and thereby cancelling out the very advantage that once justified Bt Cotton’s high cost. The result was a cycle of rising cost and mounting debt for farmers, which led to an epidemic of suicides among small farmers, unable to see the light at the end of an ever darkening tunnel.
Monsanto’s case was not an anomaly. Foreign multinationals exercised significant control over multiple sectors of Indian agriculture. Bayer dominated the pesticide market, while Syngenta—now under Chinese ownership—controlled 12% of rice seed distribution. Taken as a whole, foreign firms represent roughly 60% of India’s agrochemical market, producing 17% of the nation’s total agricultural GDP.
A Fight for Sovereignty: The Indian Government Strikes Back
As seed prices soared and farmers’ distress grew, the Indian government took decisive action. In 2016, it imposed a price cap on Bt Cotton seeds, slashing Monsanto’s royalty fees. In 2019, the Supreme Court of India delivered a further blow, ruling that plants and seeds could not be patented under Indian law.
To reduce reliance on Monsanto’s Bt Cotton, India prioritised the development of non-GM cotton alternatives, encouraging Indian seed companies to build and maintain indigenous seed banks. Unlike the United States, India maintains stringent restrictions on genetically modified crops, citing environmental and health concerns. The government also imposed strict controls on glyphosate, further limiting Monsanto’s capacity to expand its herbicide-linked dealings in the country.
As a result, Monsanto shares in the Bt Cotton market were brought down to 30%, foreign firms’ control over the hybrid seed market declined to 45%, while the total foreign agrobusinesses’ share of India’s agricultural GDP fell to 10%.
In a broader bid to prevent foreign monopolisation, India introduced rigorous Foreign Direct Investment regulations in agriculture. While foreign firms could invest in research and technology, direct ownership of farmland remains restricted. These policies are designed not only to protect Indian farmers but also to uphold national self-reliance in an era of shifting geopolitical power dynamics.
Repercussions for Foreign Investors
India’s regulatory stance has fundamentally altered the landscape for multinational agribusinesses. For companies specialising in genetically modified seeds, the country has become a significantly less attractive market. Regulatory uncertainty remains a persistent challenge, underscoring the risk of investing in India’s agricultural sector. Agribusinesses seeking to operate in contract farming must navigate a complex regulatory environment, while often being subjected to bureaucratic scrutiny. This has made India a challenging, if not outright hostile, market for firms accustomed to more liberalised economies.
Yet, despite these constraints, opportunities are still present . The government’s emphasis on organic farming, indigenous seed development, and sustainable agricultural practices has opened new avenues for investment. Companies specialising in eco-friendly fertilizers and digital farming solutions —particularly those that align with India’s broader push for self-sufficiency—may find a more favourable environment.
India’s actions against Monsanto are more than a battle over seed prices or intellectual property rights. They symbolise an India asserting its national sovereignty in the face of multinational corporations. The struggle between foreign agribusinesses and the Indian government is not solely economic; it is part of a larger geopolitical realignment, reflecting the rise of nationalist policies that prioritise domestic industry over foreign capital.
Statement
The Indian Supreme Court’s decision to curtail Monsanto’s patent claims effectively secured Indian seed companies’ independence. More broadly, India’s regulatory stance provides a template for other developing nations grappling with the challenge of balancing foreign investment with local agricultural interests. As the global agribusiness landscape evolves, India’s model may serve as both a cautionary tale and a roadmap for countries seeking to reclaim control over their food systems.