Royalties paid to Monsanto by domestic companies may be cut by 20 per cent. India also plans to cut prices of genetically modified (GM) cotton seeds to help farmers whose fields have been ravaged by pest attacks.

US-based Monsanto, is the world’s biggest seed maker and had threatened to leave India in 2016 when the government cut its royalties by more than 70 per cent. Farmers buy GM cotton seeds from Indian seed makers who pay to use Monsanto’s proprietary technology to produce them. More than 90 per cent of India’s cotton crop is genetically modified.

In 2017-18 India’s cotton output is set to rise 9.3 per cent but won't be the record high predicted by industry analysts because bollworm caused damage in some regions. India approved the first GM cotton seed trait in 2003, and an upgraded variety in 2006, helping transform the country into the world’s top producer and the second-largest exporter of the fiber.

Monsanto has been at loggerheads with seed firms and with authorities in India over how much it can charge for its GM cotton seeds, costing it tens of millions of dollars in lost revenue a year. Monsanto says some companies in India owe it millions in royalty payments.