Monsanto Co has withdrawn an application seeking approval for its next generation of genetically modified cotton seeds in India, a major escalation in a long-running dispute between New Delhi and the world's biggest seed maker.
A letter sent by Monsanto's local partner in India, the conglomerate's biggest market outside the Americas, strongly objects to a government proposal that would force Monsanto to share its technology with local seed companies.
The company is also at loggerheads with India over how much it can charge for its genetically modified cotton seeds, costing it tens of millions of dollars in lost revenue every year.
The unprecedented decision to pull the application, which has not previously been reported, could set back Monsanto's efforts to introduce its new seed, called Bollgard II Roundup Ready Flex technology, for years and lead to further losses.
It will also ratchet up pressure on the Indian government, as it undermines Prime Minister Narendra Modi's efforts to make the country look more attractive to foreign investors.
It could also hurt Indian cotton farmers. The new seed variety helps fight against weeds, which sap the cotton crop of vital nutrients and depress yields.
A Monsanto spokesman declined to comment on the withdrawal.
A spokesman for the environment ministry, which had the application before it, was not available for comment.
In a letter, dated July 5, Maharashtra Hybrid Seeds Co Ltd (Mahyco), Monsanto's technology partner in India, singled out a government proposal, mooted in May, that would require Monsanto to share its proprietary technology.
After protests by Monsanto and other global seed companies, the government temporarily withdrew the order and decided to seek feedback from stakeholders. It is now evaluating the feedback.
Mahyco said in the letter, a copy of which was seen by Reuters, that the proposal "alarmed us and raised serious concerns about the protection of intellectual property rights."
Mahyco also asked the regulator, Genetic Engineering Appraisal Committee (GEAC), to return data and other material submitted by it as part of the application.
The regulator has done that, a government official said.