While agriculture’s share in India’s economy has progressively declined to less than

15% due to the high growth rates of the industrial and services sectors, the sector’s
importance in India’s economic and social fabric goes well beyond this indicator.
First, nearly three-quarters of India’s families depend on rural incomes. Second, the
majority of India’s poor (some 770 million people or about 70 percent) are found in
rural areas. And third, India’s food security depends on producing cereal crops, as
well as increasing its production of fruits, vegetables and milk to meet the demands
of a growing population with rising incomes. To do so, a productive, competitive,
diversified and sustainable agricultural sector will need to emerge at an accelerated
pace.

India is a global agricultural powerhouse. It is the world’s largest producer of milk,

pulses, and spices, and has the world’s largest cattle herd (buffaloes), as well as the
largest area under wheat, rice and cotton. It is the second largest producer of rice,
wheat, cotton, sugarcane, farmed fish, sheep & goat meat, fruit, vegetables and tea.
The country has some 195 m ha under cultivation of which some 63 percent are
rainfed (roughly 125m ha) while 37 percent are irrigated (70m ha). In addition,
forests cover some 65m ha of India’s land.

Challenges

Three agriculture sector challenges will be important to India’s overall development

and the improved welfare of its rural poor:

1. Raising agricultural productivity per unit of land: Raising productivity per unit of
land will need to be the main engine of agricultural growth as virtually all cultivable
land is farmed. Water resources are also limited and water for irrigation must
contend with increasing industrial and urban needs. All measures to increase
productivity will need exploiting, amongst them: increasing yields, diversification to
higher value crops, and developing value chains to reduce marketing costs.

2. Reducing rural poverty through a socially inclusive strategy that comprises both
agriculture as well as non-farm employment: Rural development must also benefit
the poor, landless, women, scheduled castes and tribes. Moreover, there are strong
regional disparities: the majority of India’s poor are in rain-fed areas or in the
Eastern Indo-Gangetic plains. Reaching such groups has not been easy. While
progress has been made - the rural population classified as poor fell from nearly
40% in the early 1990s to below 30% by the mid-2000s (about a 1% fall per year) –
there is a clear need for a faster reduction. Hence, poverty alleviation is a central
pillar of the rural development efforts of the Government and the World Bank.

3. Ensuring that agricultural growth responds to food security needs: The sharp rise
in food-grain production during India’s Green Revolution of the 1970s enabled the
country to achieve self-sufficiency in food-grains and stave off the threat of famine.
Agricultural intensification in the 1970s to 1980s saw an increased demand for rural
labor that raised rural wages and, together with declining food prices, reduced rural
poverty. However agricultural growth in the 1990s and 2000s slowed down,
averaging about 3.5% per annum, and cereal yields have increased by only 1.4% per
annum in the 2000s. The slow-down in agricultural growth has become a major
cause for concern. India’s rice yields are one-third of China’s and about half of those
in Vietnam and Indonesia. The same is true for most other agricultural
commodities.

Policy makers will thus need to initiate and/or conclude policy actions and public
programs to shift the sector away from the existing policy and institutional regime
that appears to be no longer viable and build a solid foundation for a much more
productive, internationally competitive, and diversified agricultural sector.

Priority Areas for Support

1. Enhancing agricultural productivity, competitiveness, and rural growth

Promoting new technologies and reforming agricultural research and extension:

Major reform and strengthening of India’s agricultural research and extension
systems is one of the most important needs for agricultural growth. These services
have declined over time due to chronic underfunding of infrastructure and
operations, no replacement of aging researchers or broad access to state-of-the-art
technologies. Research now has little to provide beyond the time-worn packages of
the past. Public extension services are struggling and offer little new knowledge to
farmers. There is too little connection between research and extension, or between
these services and the private sector.

Improving Water Resources and Irrigation/Drainage Management: Agriculture is

India’s largest user of water. However, increasing competition for water between
industry, domestic use and agriculture has highlighted the need to plan and manage
water on a river basin and multi-sectoral basis. As urban and other demands
multiply, less water is likely to be available for irrigation. Ways to radically enhance
the productivity of irrigation (“more crop per drop”) need to be found. Piped
conveyance, better on-farm management of water, and use of more efficient
delivery mechanisms such as drip irrigation are among the actions that could be
taken. There is also a need to manage as opposed to exploit the use of
groundwater. Incentives to pump less water such as levying electricity charges or
community monitoring of use have not yet succeeded beyond sporadic initiatives.
Other key priorities include: (i) modernizing Irrigation and Drainage Departments to
integrate the participation of farmers and other agencies in managing irrigation
water; (ii) improving cost recovery; (iii) rationalizing public expenditures, with priority
to completing schemes with the highest returns; and (iv) allocating sufficient
resources for operations and maintenance for the sustainability of investments.

Facilitating agricultural diversification to higher-value commodities: Encouraging

farmers todiversify to higher value commodities will be a significant factor for higher
agricultural growth, particularly in rain-fed areas where poverty is high. Moreover,
considerable potential exists for expanding agro-processing and building
competitive value chains from producers to urban centers and export markets.
While diversification initiatives should be left to farmers and entrepreneurs, the
Government can, first and foremost, liberalize constraints to marketing, transport,
export and processing. It can also play a small regulatory role, taking due care that
this does not become an impediment.

Promoting high growth commodities: Some agricultural sub-sectors have

particularly high potential for expansion, notably dairy. The livestock sector,
primarily due to dairy, contributes over a quarter of agricultural GDP and is a source
of income for 70% of India’s rural families, mostly those who are poor and headed
by women. Growth in milk production, at about 4% per annum, has been brisk, but
future domestic demand is expected to grow by at least 5% per annum. Milk
production is constrained, however, by the poor genetic quality of cows, inadequate
nutrients, inaccessible veterinary care, and other factors. A targeted program to
tackle these constraints could boost production and have good impact on poverty.

Developing markets, agricultural credit and public expenditures: India’s legacy of

extensive government involvement in agricultural marketing has created restrictions
in internal and external trade, resulting in cumbersome and high-cost marketing
and transport options for agricultural commodities. Even so, private sector
investment in marketing, value chains and agro-processing is growing, but much
slower than potential. While some restrictions are being lifted, considerably more
needs to be done to enable diversification and minimize consumer prices.
Improving access to rural finance for farmers is another need as it remains difficult
for farmers to get credit. Moreover, subsidies on power, fertilizers and irrigation
have progressively come to dominate Government expenditures on the sector, and
are now four times larger than investment expenditures, crowding out top priorities
such as agricultural research and extension.

2. Poverty alleviation and community actions

While agricultural growth will, in itself, provide the base for increasing incomes, for
the 170 million or so rural persons that are below the poverty line, additional
measures are required to make this growth inclusive. For instance, a rural
livelihoods program that empowers communities to become self-reliant has been
found to be particularly effective and well-suited for scaling-up. This program
promotes the formation of self-help groups, increases community savings, and
promotes local initiatives to increase incomes and employment. By federating to
become larger entities, these institutions of the poor gain the strength to negotiate
better prices and market access for their products, and also gain the political power
over local governments to provide them with better technical and social services.
These self-help groups are particularly effective at reaching women and
impoverished families.

3. Sustaining the environment and future agricultural productivity

In parts of India, the over-pumping of water for agricultural use is leading to falling
groundwater levels. Conversely, water-logging is leading to the build-up of salts in
the soils of some irrigated areas. In rain-fed areas on the other hand, where the
majority of the rural population live, agricultural practices need adapting to reduce
soil erosion and increase the absorption of rainfall. Overexploited and degrading
forest land need mitigation measures. There are proven solutions to nearly all of
these problems. The most comprehensive is through watershed management
programs, where communities engage in land planning and adopt agricultural
practices that protect soils, increase water absorption and raise productivity
through higher yields and crop diversification. At issue, however, is how to scale up
such initiatives to cover larger areas of the country. Climate change must also be
considered. More extreme events – droughts, floods, erratic rains – are expected
and would have greatest impact in rain-fed areas. The watershed program, allied
with initiatives from agricultural research and extension, may be the most suited
agricultural program for promoting new varieties of crops and improved farm
practices. But other thrusts, such as the livelihoods program and development of
off-farm employment may also be key.

World Bank Support

With some $5.5 billion in net commitments from both IDA and IBRD, and 24 ongoing
projects, the World Bank’s agriculture and rural development program in India is by
far the Bank’s largest such program worldwide in absolute dollar terms. This figure
is even higher when investments in rural development such as rural roads, rural
finance and human development are included. Nonetheless, this amount is
relatively small when compared with the Government’s - both central and state -
funding of public programs in support of agriculture. Most of the Bank’s agriculture
and rural development assistance is geared towards state-level support, but some
also takes place at the national level.

The Bank’s Agricultural and Rural Development portfolio is clustered across three
broad themes with each project, generally, showing a significant integration of these
themes.

Agriculture, watershed and natural resources management

Water & irrigated agriculture

Rural livelihood development

Over the past five to ten years, the Bank has been supporting:

 R&D in Agricultural Technology through two national level projects with pan-India
implementation (the National Agriculture Technology Project and the National
Agriculture Innovation Project) coordinated by the Government of India’s Indian
Council for Agricultural Research (ICAR).
 Dissemination of Agricultural Technology: New approaches towards the
dissemination of agricultural technology such as the Agriculture Technology
Management Agency (ATMA) model have contributed to diversification of
agricultural production in Assam and Uttar Pradesh. This extension approach is now
being scaled-up across India.

Better delivery of irrigation water: World Bank support for the better delivery of
irrigation water ranges from projects covering large irrigation infrastructure to local
tanks and ponds. Projects also support the strengthening of water institutions in
several states (Andhra Pradesh, Karnataka, Maharashtra, Rajasthan, Tamil Nadu,
Uttar Pradesh) improved groundwater management practices (for instance, in the
upcoming Rajasthan Agriculture Competitiveness Project).

Sustainable agricultural practices through watershed and rainfed agriculture

development (Karnataka, Himachal Pradesh, Uttarakhand), soil reclamation efforts
(Uttar Pradesh) and, more recently, improved groundwater management practices
(for instance, in the upcoming Rajasthan Agriculture Competitiveness Project).

Improved access to rural credit and greater gender involvement in rural economic
activities through rural livelihood initiatives undertaken by a number of states
(Andhra Pradesh, Bihar, Madhya Pradesh, Orissa, Rajasthan, Tamil Nadu) and soon
to be scaled up by GOI with Bank support through a National Rural Livelihood
Mission.

Agricultural insurance by advising GOI on how to improve the actuarial design and
implementation of the insurance program (e.g. rating methodology and product
design, index insurance, use of mobile and remote sensing technology to measure
yields, etc.).

Improved farmer access to agriculture markets through policy reforms and

investments under the Maharashtra Agricultural Competitiveness Project which
aims to reform regulated wholesale markets and provide farmers with alternative
market opportunities.

The land policy agenda through analytical work as well as non-lending technical
assistance in support of GOI’s National Land Records Modernization Program.

Better rural connectivity through IDA support to the Prime Minister’s National Rural
Roads Program (PMGSY), and by connecting rural poor and smallholder farmers
through collective action to public services through Self-Help Groups (and SHG
federations), Water User Associations and Farmer Producer Organizations. Recently
the Bank’s Board of Executive Directors approved the National Rural Livelihood
Mission, which supports SHG approaches through a pan-India approach.

AGRICULTURE IN A LEGAL LENS:

The Constitution of India defines the powers of the central and state
governments. Agriculture is governed at state level. Therefore, each state can
draft its own agricultural policy. However, as agriculture is of national
significance, the central government assists in the development and
implementation of these policies. The central government's Ministry of
Agriculture and Farmers' Welfare provides broad guidelines for agricultural
policies. The state governments are responsible for the implementation and
administration of their policies through their departments for agriculture.
Agencies of the central government directly administer central schemes and
state government agencies administer state schemes. The state governments
also adopt state-specific legislation (for example, on contract farming).

Co-operatives have played a significant role in the development of the Indian

agriculture sector. Co-operatives benefit from certain tax incentives, such as tax
deductions under section 80 P of the Income Tax Act 1961. However, co-
operatives are not open to foreign investment.
The Government of India implements co-operative development programmes
through the National Co-operative Development Corporation (NCDC). The NCDC
is a statutory corporation that was established by the National Co-operative
Development Corporation Act 1962 (NCDC Act). The objectives of the NCDC are
to plan and promote programmes for the production, processing, marketing,
storage, export and import of agricultural produce, foodstuffs, industrial goods,
livestock, certain other commodities and services on co-operative principles.
The NCDC derives its funds from the central government, its internal accruals,
market borrowings and funding from international organisations, such as the
World Bank. Generally, the NCDC provides term loans to projects for up to eight
years (for example, five years for margin money loans and three years for
working capital loans).
The following business structures are also used in the agriculture sector:
 Producer companies (that is, legally recognised bodies of farmers
engaged in certain specified agriculture business activities).
 Joint ventures.
 Trusts.

8. Is there a specific competition (anti-trust) law regime for the

agriculture sector? Briefly set out the aspects of the competition regime
that are most relevant to agriculture (for example, restrictive
agreements and practices and merger control).
The Competition Act 2002 governs competition law in India to:
 Ensure fair market competition.
 Eliminate practices that hinder fair competition.
 Protect the interests of consumers and freedom of trade.
The Act establishes the Competition Commission of India.
The Competition Act applies to all markets, including the agriculture sector. There
are no specific provisions relating to its application to the agriculture sector.
The Act prohibits:
 Agreements between enterprises, persons or their associations, including
cartels, that have an adverse effect on competition.
 Abuse of a dominant positions (for example, imposing unfair or
discriminatory terms in purchase agreements).

Acquiring and holding agricultural land

Ownership

9. Are there restrictions on the acquisition of agricultural land?

Consider any restrictions on local and foreign investors, and on legal
entities and natural persons.
The procedure for the sale and purchase of land differs from state to state. For
example, the sale and purchase of agricultural land in the state of Maharashtra is
governed by the Maharashtra Tenancy and Agricultural Lands Act 1948 (MTAL
Act).
Under several state laws (including in Maharashtra and Karnataka), only
individuals can acquire agricultural land. In other states (including Delhi, Goa,
Bihar, and Tamil Nadu), both individuals and companies can acquire agricultural
land for the purpose of carrying out agricultural activities. Recently, the Karnataka
Government proposed to amend the Karnataka Land Reforms Act to allow anyone
to own agricultural land.
Foreign companies and foreign citizens cannot directly buy or own real estate in
India, except in certain permitted circumstances or with prior permission of the
Reserve Bank of India (RBI). This restriction does not apply to the acquisition of
agricultural land by Indian companies with foreign investment, where acquisition
is for undertaking an activity that is consistent with the FDI Policy (see Question
7).
Non-resident Indian citizens cannot buy and transfer agricultural land, farmhouses
or plantations, but can inherit agricultural land from Indian residents. However, a
person residing outside India who has established a branch, office or other place of
business (excluding a liaison office) in India to carry out activities in accordance
with the Foreign Exchange Management (Establishment in India of a branch office
or a liaison office or a project office or any other place of business) Regulations
2016 can acquire immovable property in India that is necessary for, or incidental
to, carrying on its activities. To do so, the person must file a declaration with the
RBI no later than 90 days from the date of acquisition. The declaration must be
made on Form IPI and include:
 Details relating to the immovable property.
 The purpose for which it was acquired.
 Details on the seller and sources of funding.

Land tenure and usage rights

10. Briefly outline the main ways that agricultural land is held. What
usage rights are typically granted over agricultural land (for example,
leases)? Are there restrictions (such as a maximum length of lease
terms)? Consider any restrictions on local and foreign investors, and on
legal entities and natural persons.
Each state has its own laws relating to land usage rights and ownership of
agricultural land. Article 246 of the Constitution of India expressly states that the
state legislatures have exclusive powers to make laws in relation to any of the
matters set out in the State List (List II) of the Seventh Schedule to the
Constitution, which includes "land, rights in or over land, land tenures including
the relation of landlord and tenant, and the collection of rents and transfer and
alienation of agricultural land".
In the absence of a contract, local law or usage to the contrary, a lease of
immovable property for agricultural or manufacturing purposes is deemed to be a
lease from year to year, terminable, on the part of either the lessor or lessee, by six
months' notice expiring with the end of a year of the tenancy (section 106,
Transfer of Property Act 1882). However, section 117 of the Transfer of Property
Act states that provisions governing leases do not apply to agricultural purposes
unless the state government declares that it is applicable through notification in
the Official Gazette. In this context, several states have strictly prohibited leases of
agricultural land (for example, Delhi, Uttar Pradesh, Karnataka and Maharashtra).
To liberalise the Indian agriculture market and promote agricultural efficiency and
equity, the central government enacted the Model Agriculture Land Leasing Act
2016 (Model Act) and has urged states to adopt the Model Act in the Union Budget
for 2020-21. Under the Model Act, farmers will be able to lease their agricultural
land for agricultural and related activities.

Special acquisition procedures

11. Are there any compulsory tendering or prior approval procedures

required for a sale of agricultural land? Briefly set out these procedures
and any approvals required. Are there mandatory minimum land prices
if the government sells agricultural land?
The approval procedures and approval authorities for the sale and purchase of
agricultural land vary from state to state.
A common provision found in state laws is that the sale, gift, exchange or lease of
any agricultural land must be in favour of an agriculturist to be valid. An
"agriculturist" is a person who cultivates the land personally.
Under the MTAL Act (Maharashtra), the sale and purchase of agricultural land
requires prior approval of the Collector (that is, a person authorised by the state
government under the MTAL Act). No prior approval is required to sell
agricultural land to any person for the purpose of bona fide industrial use or for the
development of integrated township projects, if the land is located in:
 An industrial zone under a draft plan, final regional plan, or draft of a final
town planning scheme prepared under the Maharashtra Regional and Town
Planning Act 1966.
 An area that is not covered by any such plan or scheme.
 An area taken over by a private developer for the development of an
integrated township project.
The procedure for the sale of agricultural land in Maharashtra can be summarised
as follows:
 The landlord must apply to an agricultural land tribunal established under
the MTAL Act, which determines the reasonable price of the land payable
either as a lump sum or in annual instalments.
 The landlord must make an offer in the prescribed manner to any tenant or
such other persons and bodies mentioned in the priority list issued by the
Collector, giving due regard to the needs of agricultural labourers, artisans,
persons carrying on ancillary agricultural activities, and any other person in
the village.
 The persons to whom the offer is made must inform the landlord within the
date of receipt of the offer as to their willingness to buy the land at the
reasonable price fixed by the agricultural land tribunal. If more than one
person are interested in buying the land, the person with the highest priority
under the above priority list has a preferential right to buy the property.
 The buyer must deposit the reasonable price with the agricultural land
tribunal within a reasonable period, as set by the landlord.
(Section 64, MTAL Act.)
There are no regulations on the sale of agricultural land by the government.
12. In which circumstances can the government authorities expropriate
agricultural land?
The Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act 2013 applies to land acquisitions carried out
for public purposes either by the government or private companies. The
government proposed a few amendments to the Act in 2015, but these are not yet
in force.
The government can expropriate land in favour of:
 Public private partnership projects that serve a public purpose, provided
prior consent of at least 70% of the affected landowners is obtained.
  Private companies that serve a public purpose, provided prior consent of at
least 80% of the affected landowners is obtained.
(Section 2, Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act 2013.)
"Public purposes" include defence, infrastructure development, urban and rural
development, and so on.

Water controls

13. Is the abstraction of water controlled by licence or quantities? Briefly

set out the main provisions, legislation and regulatory authorities.
The Central Ground Water Authority (CGWA) is the main organisation of the
Ministry of Water Resources dealing with ground water and related issues. The
CGWA regulates ground water development in various ways, including:
 The grant of no objection certificates (NOCs) for the abstraction of ground
water.
 Issuing advisories, directions, notifications, and so on, as and when
necessary.
On 24 September 2020, the Government of India issued Guidelines to regulate and
control ground water extraction in India. These Guidelines provide, among other
things, that since the livelihood of farmers is dependent on agriculture, agricultural
users are exempted from obtaining a NOC from the CGWA for ground water
withdrawal/abstraction. However, competent state departments
(agriculture/irrigation/water resources) should take suitable measures to ensure the
sustainability of ground water sources.

Tax

14. Which taxes apply to the sale and transfer of land ownership or

usage rights?
The following taxes apply on the sale and transfer of land.

Capital gains tax

Agricultural land is not considered a capital asset. Therefore, it is not subject to
capital gains tax. However, the Finance Act 2013 has introduced certain exceptions
under which land is not considered agricultural land if:
 It is located in any area within the jurisdiction of a municipality that has a
population of at least 10,000 according to the latest census.
 It is located within:
 two kilometres of a municipality with a population of between 10,000
and 100,000;
 six kilometres of a municipality with a population of between
100,000 and 1 million; or
  eight kilometres of a municipality with a population of more than 1
million.

Stamp duty
Stamp duty is charged on documents and not on transactions. Stamp duty is
governed by state law and varies from state to state. For example, in Punjab, the
transfer of agricultural land is not subject to stamp duty. However, in Maharashtra,
stamp duty at 0.5% applies to the partition of agricultural land.
A sale and transfer of immovable property for INR100 or more must be effected by
registered deed, which may trigger stamp duty liability.

Land revenue tax

Land revenue tax is a state tax governed by state law that is payable on a yearly
basis on the gross proceeds of agricultural land. The applicable rates vary in each
state. In Maharashtra, agricultural land is subject to land revenue tax except if it is
covered by a special contract with the state government (section 64, Maharashtra
Land Revenue Code 1966). Land revenue tax payable in relation to agricultural
land is generally minimal.

Taking security

15. How is security over agricultural land typically created and

perfected to raise finance?
Agriculture is governed by state laws. Each state has its own laws on mortgages of
agricultural land.
For example, in the state of Punjab, one of the leading agricultural states in India,
mortgages of agricultural land are governed by the Punjab Agricultural Credit
Operations and Miscellaneous Provisions (Banks) Act 1978. To mortgage
agricultural land in the state of Punjab, the mortgagor must make a declaration to
the bank that they have created a charge on the land in favour of the bank in return
for financial assistance. The language of the form must comply with the Schedule
to the Act. The mortgagor must submit the mortgage agreement to
the tehsildar (that is, the revenue administration officer who is in charge of a tehsil
or sub-division of a district) and naibtehsildar (that is, the deputy of a tehsildar) of
the district, who must then register the agreement with the Revenue Department.
In Maharashtra, it is only possible to create a mortgage over agricultural land for
specific purposes, such as agriculture/cultivation and/or educational and charitable
purposes.

Crop seed business

16. State the approvals/licences that are required to import new plant
species or varieties and crop growing technologies. Briefly outline the
approval process, legislation and regulatory authorities.

Import requirements
The domestic laws and regulations that regulate the seed industry in India are the:
 Seeds Act 1966 (Seeds Act) and Seeds Rules 1968 (Seeds Rules). The
Seeds Act is the primary legislation that regulates the crop seed industry in
India. The Seed Rules were enacted to supplement the Seeds Act 1966. The
authorities set up under the Seeds Act are the:
 Central Seed Committee;
 Central and State Seed Laboratory; and
 Seed Certification Agency.
 Seeds (Control) Order 1983 (Order 1983). This provides that no person
can carry on the business of selling, exporting or importing seeds at any
place except in accordance with a licence granted under the Order.
 Plant Quarantine (Regulation of Import Into India) Order 2003 (PQ
Order). This provides that no consignment of plants or plant products can
be imported into India without a valid permit. Under the PQ Order, plant
species mentioned in Schedule IV cannot be imported, and the plant species
and plant varieties mentioned in Schedules V, VI and VII can only be
imported with an import permit or special authorisation. All other plant
species and plant varieties, including new plant species or varieties, can only
be imported in India after a pest risk analysis (PRA) is carried out in
accordance with the guidelines issued by the Plant Protection Adviser
(PPA). All consignments must also be accompanied by a phytosanitary
certificate issued by the authorised officer of the country of origin. The list
of prohibited, restricted and regulated plant species under the PQ Order is
available
at: https://plantquarantineindia.nic.in/PQISPub/html/consumeProhibited.ht
m.
The PQ Order establishes the PPA, which is responsible for:
 Issuing import permits.
 Imposing restrictions and prohibitions on certain varieties of plants (under
Schedules IV, V, VI, and VII).
 Conducting PRAs in accordance with international phytosanitary standards.
 Inspections and disinfestations, as required, are carried out at certain points
of entry specified in the PQ Order.
The following rules apply to the import of seeds and plant products:
 The import of seeds, tubers, bulbs, cuttings, saplings of vegetables, flowers
and fruit is allowed without a licence, but requires an import permit under
the PQ Order.
  The import of seeds, planting materials and living plants by the ICAR is
allowed without a licence in accordance with conditions specified by the
Ministry of Agriculture and Farmers' Welfare.
 The import of seeds/tubers of potato, garlic, fennel, coriander, cumin, and so
on requires an import permit granted under the PQ Order.
 The import of seeds (including seeds of rye, barley, oat, maize, millet,
jowar, bajra, ragi, other cereals, soybean, groundnut, linseed, and so on) is
allowed without a licence under the New Policy on Seed Development
1988, but requires an import permit granted under the PQ Order. A small
quantity of seeds to be imported must be given to ICAR, or farms accredited
by ICAR, for trial and evaluation for one crop season. On receipt of
applications for commercial import, the Department of Agriculture and
Cooperation will consider the trial/evaluation report on the performance of
the seed and their resistance to seed/soil-borne diseases. All importers must
make available a small specified quantity of the imported seeds to the ICAR
at cost price to the gene bank of the National Bureau of Plant Genetic
Resources. The New Policy on Seed Development 1988 was revised on 27
June 2011 to allow the import of specified quantities of seeds of wheat and
paddy initially for trial and evaluation purposes. Based on the results of
trials for one crop season, a company may be allowed to import seeds of
wheat and paddy for a period not exceeding two years subject to certain
conditions. The import of these seeds is only allowed on a case-to-case
basis, under a licence issued by the PPA on the basis of recommendations of
the Department of Agriculture and Cooperation's EXIM Committee.

International standards
India became a signatory to the Secretariat of the IPPC on 30 April 1952, and
ratified the IPPC on 9 June 1952. The IPPC office representatives were unavailable
for comment about India's adoption of the IPPC standards. However, the Indian
regulations generally comply with most IPPC standards.
The IPPC sets out some general guidelines for national plant protection and
recommends the setting up of a plant protection organisation in every state. The
responsibilities of this organisation include the:
 Issuance of certificates to importing parties.
 Surveillance of both cultivated and wild flora and plant products in storage
and transport.
 Inspection and disinfection of plant products in international trade.
 Protection of endangered species.
 Conduct of pest risk analyses.
The IPPC also discusses the necessity of phytosanitary certification, to ensure that
exported plants conform with a certain standard level of quality. It also contains
provisions on imports, and states that to prevent the spread of pests, contracting
parties can choose to restrict or prohibit the entry of certain plants and materials.
17. Briefly outline any additional approvals/licences that are required
for:
 Setting up R&D centres and test plots for new crops.
 Crop seed production.
 Commercial crop production.
 Distribution of seeds or crops (wholesale, retail and e-commerce).

R&D centres and test plots for new crops

The setting up of R&D centres and the use of test plots for new crops is not subject
to specific requirements.

Crop seed production

Crop seed production remains unregulated if the seeds are not intended for
certification. If the seeds are intended to be certified, their growing and harvesting
must comply with the procedure set out by the Seed Certification Agency. The
object of seed certification is to maintain and make available to the public high-
quality propagating material, by ensuring genetic identity and genetic purity.

Commercial crop production

See above, Crop seed production.

Distribution of seeds or crops

Under Order 1983, no person can carry on the business of selling seeds at any
place without obtaining a licence. Any person who intends to sell or distribute
seeds must make an application to the licensing authority appointed by the state
under Order 1983. A sale licence will not be issued if:
 The person's earlier licence is under suspension and an application for a
licence was made during the period of suspension.
 The person's earlier licence has been cancelled, and the application for a
licence was made within one year of such cancellation.
 The person has been previously convicted under the Essential Commodities
Act 1955, and the application for a licence was made within three years of
such conviction or order.

Plant variety rights

18. What are the legal conditions to obtain a plant variety right (PVR)
and which legislation applies?
Under the Protection of Plant Varieties and Farmers' Rights Act 2001 (PVR Act), a
plant variety can be registered if it complies with the requirements of novelty,
distinctiveness, uniformity and stability (section 15, PVR Act).
A variety is considered novel if it has not been sold or otherwise disposed of with
the consent of the breeder or their successor for the purposes of exploitation:
 In India: earlier than one year before the application filing date.
 Outside India:
 earlier than six years before the application filing date, for trees and
vines; or
 earlier than four years before the application filing date, in all other
cases.
Distinctiveness means that the variety must be different in at least one essential
characteristic from other varieties that are known to the public. Under the
requirement of uniformity, the variety must be sufficiently uniform in its essential
characteristics. Stability means that the essential characteristics of the variety must
remain unchanged after repeated propagation or at the end of each cycle of
propagation. These requirements are assessed under the DUS test.
India is not a signatory to the International Convention for the Protection of New
Varieties of Plants 1961 (UPOV Convention).
19. How is a PVR obtained in your jurisdiction?
The registration process for PVRs in India is governed by the PVR Act. The plant
variety registration process is available at: www.plantauthority.gov.in/rp2.gif.
To register a plant variety, the application must:
 Be in respect of a variety.
 Specify the denomination of the variety.
 Include the applicant's affidavit stating that the variety does not contain gene
sequences involving terminator technology.
 Provide complete information on the parental lines from which the variety
was derived, the geographical location from where material was taken, and
details of the contributions of all breeders involved.
 Include a brief description of the variety highlighting its novelty,
distinctiveness, uniformity and stability.
 Declare that all genetic material involved was lawfully acquired.
Only the first component needs to be fulfilled in applications relating to farmers'
varieties.
The PVR Act specifies the list of people who can file an application for
registration of a plant variety, which includes:
 The breeder.
 Assignees or successors of the breeder.
 A farmer or group of farmers.
 A university or publicly funded organisation.
An application for registration can be made for extant varieties, farmers' varieties,
or any genera or species specified by the Central Government in the Official
Gazette for this purpose.
The DUS test process differs from crop to crop. The timing and location of the test,
as well as the quantity and quality of the seeds, is determined by the Protection of
Plant Varieties and Farmers' Rights Authority.
The PVR Act specifies the centres where tests of a specific crop can be conducted,
as well as the required minimum level of purity and germination, and acceptable
moisture content of the seeds. DUS tests are normally conducted over at least two
independent and similar growing seasons. The tests must be conducted in at least
two test locations, under conditions favouring normal growth and expression of all
the test characteristics.
Applicants submitting seed material from a country other than India must ensure
compliance of their consignment with all relevant national legislation and
regulations.
On accepting an application, the Protection of Plant Varieties and Farmers' Rights
Authority must advertise the application, with any pictures or drawings, to allow
objections from interested persons. A person can raise objections by way of a
notice of opposition within three months of the date of advertisement.
Within two months of notification of any objections, the applicant must file a
counter-statement stating the grounds on which their application is based. The
Registrar must notify the counter-statement to the person who brought the
opposition. The Registrar decides on the opposition after hearing both parties and
considering the evidence submitted.
PVR registration provides nationwide protection.
20. How long does PVR protection last? Are there restrictions on the
rights of the PVR holder or exemptions, such as farmer's privilege?

Extent of the protection

A certificate of registration issued under the PVR Act is valid for:
 Nine years, for trees and vines.
 Six years, for other crops.
A certificate is reviewed and renewed for the remaining period of protection on
payment of the prescribed fees. The period of PVR protection is:
 For trees and vines: 18 years from the date of registration.
 For extant varieties: 15 years from the date of notification of that variety by
the central government under section 5 of the Seeds Act 1966.
 For other varieties: 15 years from the date of registration.

Restrictions on the rights of the holder

A certificate of registration granted under the PVR Act confers an exclusive right
on the breeder or their successor, agent or licensee to produce, sell, market,
distribute, import or export the registered variety. However, the central government
or the state government is deemed to be the owner of the rights relating to an
extant variety, unless a breeder or their successor established their rights over that
variety (section 5, Seeds Act 1966).
A breeder can authorise another person to deal with the registered variety subject
to certain restrictions or conditions. The agent or licensee is entitled to call on the
breeder to bring infringement proceedings. If the breeder refuses or neglects to do
so within three months, the agent or licensee can bring proceedings in their own
name making the breeder the defendant.

Farmer's privilege
Chapter VI of the PVR Act deals exclusively with farmers' rights. A farmer who
has bred or developed a new variety of seed/plant is entitled to registration and
protection under the Act and the process for registration is much simpler.
Where propagating material registered under the PVR Act has been sold to a
farmer, the breeder of the material must disclose the expected performance of the
material to the farmer. If this performance is not achieved, the farmer can claim
compensation from the Protection of Plant Varieties and Farmers' Rights
Authority, who will hear both parties in turn and pass an appropriate direction.
The PVR Act allows farmers to save, use, sow, resow, exchange, share or sell their
farm produce, including produce from a seed of a variety protected under the PVR
Act. However, the PVR Act prevents farmers from selling "branded seeds" of a
variety protected under the Act. "Branded seeds" is defined under the PVR Act as
seeds put in a package or any other container and labelled in a manner indicating
that the seed is of a variety protected under the Act. Therefore, farmers can use
harvested material of plant varieties owned by third parties for self-propagation,
subject to branded seeds exception.
21. Which legal actions are available to owners of PVR in the event of
PVR infringements?
An owner of PVR can bring an action for PVR infringement in a court not lower
than a district court (PVR Act). Available relief include an injunction and either
damages or an account of profits. PVR infringements can be subject to both civil
and criminal actions.

Genetically modified (GM) crops

22. Set out the legislation and regulatory authorities in relation to
genetically modified (GM) crops. Has your jurisdiction ratified the
Cartagena Protocol on Biosafety 2002? What is your government's
policy in relation to GM crops?
The Rules for the Manufacture, Use, Import, Export and Storage of Hazardous
Micro-Organisms Genetically Engineered Organisms or Cells 1989 (GM Rules) is
the primary legislation on the import and export of GM materials, and designate
the competent authorities to regulate GM plants, their composition and internal
structure.
The regulatory bodies set up under the GM Rules are the:
 Genetic Engineering Approval Committee (GEAC).
 Review Committee on Genetic Manipulation.
 Recombinant DNA Advisory Committee (RDAC).
 State Biotechnology Co-ordination Committees (SBCC).
 District Level Committees (DLCs) and Institutional Biosafety Committee
(IBSC).
The objective of these institutions is to regulate and monitor safety related-aspects
for the large-scale use of hazardous micro-organisms in research and industrial
production from an environmental angle. These committees are also responsible
for granting approval on proposals relating to the release of GM organisms into the
environment, including experimental field trials.
India became a signatory to the Cartagena Protocol on Biosafety 2002 on 23
January 2001, and ratified the Protocol on 17 January 2003.
The central government can, by notification in the Official Gazette, issue rules in
respect of the procedures, safeguards, restrictions and prohibitions on the handling
of hazardous substances in different areas (sections 6, 8 and 25, Environmental
Protection Act 1986). The central government enacted the GM Rules under this
provision.
23. Set out the permit/licensing requirements and prohibitions in
relation to GM related activity and the key legislation and regulatory
authorities.
Under the Cartagena Protocol on Biosafety 2002, a country exporting living
modified organisms for intentional introduction into the environment (for example,
seeds for planting) must obtain an advance informed agreement from the importing
country before the first shipment takes place. The Protocol provides for decisions
to be based on risk assessment. Under certain circumstances, importers can ask the
exporter to carry out the risk assessment.
Broadly, the approval of GM crops in India is a four-step process, as follows:
 Research in government or private laboratories, where scientists identify
beneficial traits and carry out genetic transformations in contained
conditions.
 Open field trials, where breeding and testing is carried out in an open
environment by confined field trials.
 Securing approval for environmental release.
 Market acceptance and commercial production.

Field trials
The Guidelines for the Conduct of Confined Field Trials of Regulated Genetically
Engineered Plants in India summarises the information requirements and
procedures used by the two regulatory committees, the RCGM and the GEAC, in
the evaluation of applications. The guidelines distinguish between research
conducted under "contained conditions" and "confined field trials".
Applications for confined field trials must be made at least 60 days in advance of
the proposed trials.
Applications must be based on the forms annexed to the guidelines. Trials must be
monitored by specified authorities during planting, growing and harvesting.
Records of all trials relating to equipment, transportation, on-site monitoring and
storage must be maintained by the permitted party and available to the GEAC and
the RCGM.
Within three months of harvest, the permitted party must submit a field trial report
to the GEAC and RCGM. No harvest or by-product of a confined trial can be used
either as human food or livestock feed and must be disposed of by a method
approved by the RCGM or GEAC.
The following guidelines apply to confined field trials for all crops:
 All equipment and tools used must be cleaned onsite using acceptable
methods such as hand-cleaning, compressed air, vacuuming, or high-
pressure water.
 A map of the area must be appended to the record of planting, which must
be submitted to the GEAC within seven days of completion of planting.
 A notice board including details of the trial must be put up by the person in
charge at the trial site.
Requirements for post-harvest management of trial sites (such as monitoring and
corrective action) have also been laid down.

Production and sale

Sections 7 to 12 of the GM Rules sets out the permit requirement and the
procedure to obtain a permit for the production, sale, import, transport, use,
manufacture of GM crops in India.
Under the GM rules, no one can import, export, transport, manufacture, use or sell
any GMOs or substances and products containing GMOs without the approval of
the GEAC. The use of GMOs for the purpose of research is only allowed in
laboratories notified under the Environment Protection Act 1986.
The application for approval must include:
 Information on examinations of the substance.
 An on-site emergency plan.
Any changes in the information submitted that occur after approval has been
granted must be notified to the GEAC.
The requirements for approval to grow, produce and sell GM food or feed are as
follows:
 Assessment of toxicology. This is required before substances whose effects
are unknown are introduced into the food supply chain. This study is not
necessary if that substance or its close relative has been consumed safely in
food at equivalent intakes.
 Assessment of allergenicity. This is primarily to prevent unexpected
exposure of sensitised individuals to food allergens. In light of the lack of a
 definitive test to predict allergenic response, a case-by-case approach must
be undertaken.
 Compositional analysis of key components. Concentrations of key
components of the GM plant must be compared to its conventional
counterpart, as a change in key nutrients can affect the overall diet of
consumers.
 Intended nutritional modifications. Foods derived from plants that were
subjected to modification to intentionally alter nutritional quality must be
assessed, to analyse the consequences of such change on the overall diet.
 Unintended effects. The random insertion of DNA sequences into the plant
genome can result in the formation of new or changed patterns of
metabolites. These must be tested in order to prevent unanticipated
consequences.
After conducting the confined field trial and assessing the above requirements, the
GEAC can grant approval to the applicant for a period not exceeding four years,
renewable for two years at a time.
The Legal Metrology (Packaged Commodities) Amendment Rules 2012, which
came into force on 1 January 2013, require any packaging containing GM food to
bear the letters "GM" on its display panel. Breach of the provision is punishable
with a fine of up to INR5,000.

Penalties
In the event of non-compliance with any of the above rules, the DLC or SBCC can
take appropriate measures at the expense of the responsible person. If an
immediate intervention is needed to prevent damage to the environment, nature or
health, the DLC or SBCC can take appropriate measures (even without notice).

Animal and animal welfare issues

Importing animals

24. Briefly outline the import/export control measures for animals and

related genetic resources.
The Livestock Importation Act 1898 governs the import of live animals and
livestock. The Department of Animal Husbandry and Dairying regulates imports of
livestock and livestock products. Imports of live animals fall within the restricted
list of imports under the EXIM Policy, for which the importer must obtain a
licence from the Director General of Foreign Trade (DGFT).
The Department of Animal Husbandry and Dairying has identified the classes of
animals that can be considered "livestock" and has set out the import and
quarantine procedure for live animals/livestock. The import of these products
requires a sanitary import permit (SIPs), which is issued by the Department after
conducting a risk analysis. The SIP must be obtained prior to shipping from the
country of origin. SIPs are valid for one year or six months depending on the
nature of the product and can be used for multiple consignments. An SIP is not a
licence, but a certificate certifying compliance with India's sanitary requirements.
See www.dahd.nic.in/trade for further details. Export requirements depend on the
policy of the importing country.
Animal quarantine and certification services (AQCS) are provided in India at
Quarantine Stations appointed by the Department of Animal Husbandry and
Dairying. There are currently Quarantine Stations in Delhi (NCR), Kolkata,
Chennai and Mumbai, where inspections of animals and livestock are carried out
and certificate of health and sanitary fitness are issued.
The import and export of GMOs and micro-organisms is governed by the GM
Rules, which specify that all import/export of GM organisms require approval
from the GEAC (see Question 22 and Question 23).
A compiled list of restrictions and prohibitions is available on the website of the
Ministry of Commerce and Industry, Department of Commerce. This website
requires an ITC code or description of the item for which the compiled list is to be
obtained. Some of the ITC codes are:
 Live animal: ITC Code 0106.
 Dead animals that are unfit for human consumption: ITC Code 0511.
 Animal products used in the preparation of pharmaceutical products, fresh,
chilled, frozen or otherwise provisionally preserved: ITC Code 0510.
The Department of Animal Husbandry and Dairying provides separate guidelines
for the import/export of germoplasms.
Restrictions imposed by the Indian authorities on the import/export of live animals
and animal products conform with Article 2.1 of the WTO Agreement on the
Application of Sanitary and Phytosanitary Measures (SPS Agreement), which
recognises India's basic right to protect its biodiversity and impose valid sanitary or
phytosanitary measures to protect its human and animal life.
In addition, the SPS Agreement designates OIE codes as the specified standards to
be met for import policies on animals and animal products. However, the relevant
ministry and concerned office has not provided precise information on the
steps/measures taken to meet the OIE standards.

Animal welfare

25. Briefly outline the regulatory regime for animal welfare.

Animal rights are protected under the Constitution of India. Every citizen has a
fundamental duty to protect wildlife and have compassion for all living creatures
(Article 51A(g), Constitution). The state has the following duties:
 Organise agriculture and animal husbandry in accordance with modern,
scientific approaches.
 Take steps to preserve and improve breeds, and prohibit the slaughter of
cows, calves, and draught cattle.
 Protect, safeguard and improve the forests and wildlife of the country.
(Articles 48 and 48A, Constitution.)
The laws governing animal welfare are as follows:
 Prevention of Cruelty to Animals Act 1960. This is the main legislation
regarding animal protection in India. The object of the Act is to prevent the
infliction of unnecessary pain or suffering on animals.
(https://www.peopleforanimalsindia.org/images/pdf/ThePreventionofCruelt
ytoAct,1960(PCAAct).pdf)
 Wildlife Protection Act 1972. This provides for the protection of wild
birds, animals, plants, and so on. (https://indiankanoon.org/doc/1781078/)
 Breeding of and Experiments on Animals (Control and Supervision)
Rules 1998 (further amended in 2001 and 2006). These provide the
general requirements for breeding and using animals for research, including
rules governing facilities, personnel, and procedures.
 Establishment of Medical College Regulations 2013. These ban the use of
vivisection in medical education.
 Education (Amendment) Regulations 2014. These ban the use of animals
for the purpose of pharmacy education.
 Drug and Cosmetics Rules 1945. These ban cosmetic testing on animals,
as well as the import of cosmetics that have been tested on animals.
 Food Safety and Standards (Licensing and Registration of Food
Businesses) Regulation 2011. This contains provisions on the welfare of
animals during the slaughter process.
Other relevant rules include the:
 Dog (Breeding and Marketing) Rules 2017.
 Prevention of Cruelty to Animals (Regulation of Livestock Markets) Rules
2017.
 Prevention of Cruelty to Animals (Regulation of Livestock Markets) Rules
2017.
 Prevention of Cruelty to Animals (Care and Maintenance of Case Property
Animals) Rules 2017.
 Animal Birth Control (Dog) Rules 2001.
The Animal Welfare Board of India (established in 1962 under the Prevention of
Cruelty to Animals Act) is a statutory advisory body on animal welfare laws and
promotes animal welfare in India. The Board acts as an advisory to the
Government of India on animal welfare issues.
26. Does the law of your jurisdiction allow for patentability of livestock
genes on the grounds of isolating and purifying them? Is there legal
protection for animal breeding know-how and a resulting animal
nucleus?
Patents are governed by the Patents Act 1970, which provides that a naturally
occurring living organism or non-living substance cannot be patented, except
micro-organisms. Additionally, the whole or any part of animals or plants cannot
be patented.
This implies that Indian law precludes the patentability of livestock genes on the
grounds of mere isolation and purification. However, a genetically modified
sequence that is new, inventive and has industrial application is patentable.
Therefore, genes may be patentable on application of significant human
intervention revealing their distinct functions, provided that the other patentability
requirements are met.
There is no specific legislation on the protection of know-how in India. Animal
breeding know-how can only be protected through a contract prohibiting the
disclosure of know-how.
27. Are there legal or practical restrictions on the introduction of new
breeds/species, the breeding of certain animal species or certain breeding
practices?
There are no legal or practical restrictions on the introduction of new
breeds/species, except for the breeding of any animal considered an endangered
species under the Indian Wildlife (Protection) Act 1972 or any of the other law in
force, which must be carried out under the instruction of the competent authorities.
Breeding processes involving the use of pathogenic micro-organisms are subject to
the GM Rules. Additionally, the Department of Animal Husbandry and Dairying
restricts the breeding of lab animals outside lab facilities.

Agricultural safety and product liability

Standards

28. Summarise the system of food safety standard setting, the main

regulator(s) and regulations. If industry input on the standards is
possible, indicate how this is conducted.
Food safety and standard setting are governed by the Food Safety and Standards
Act 2006 (FSS Act). The FSS Act consolidates the laws relating to food and
establishes the Food Safety and Standards Authority of India (FSSAI).
The FSSAI is responsible for:
 Setting science-based standards.
 Regulating the storage, manufacture, distribution, sale and import of food
products.
 Ensuring that food for human consumption is safe and nutritious.
The FSSAI is composed of a Chairman, 22 members from various ministries and
departments, and two representatives of the food industry (one of whom represents
small-scale industries).
The Food Safety and Standards (Licensing and Registration of Food Business)
Regulations 2011 (FSSAI Licensing Regulations) require every food business
operator (FBO) to obtain a licence/registration from the Central Licensing
Authority for operating a food business in India.
The FSSAI also regulates e-commerce FBOs (both inventory and marketplace
models), through the imposition of licensing requirements and other e-commerce-
related compliance requirements (see Guidelines for operations of e-commerce
FBOs dated 2 February 2017 and FSSAI Direction regarding re-operationalisation
of the Food Safety and Standards (Licensing and Registration of Food Businesses)
Amendment Regulations 2020 dated 19 August 2020). All e-commerce FBOs must
comply with FSS Amendment Regulations, but these will only take effect after
final regulations are notified in the Official Gazette.
There are numerous other rules and regulations of the Ministry of Health and
Family Affairs relating to food safety and standard setting, which can be accessed
on the FSSAI's website.
As a member of the WTO, India must ensure that food supplied to consumers in
the country is safe to eat. The WTO SPS Agreement and Agreement on Technical
Barriers to Trade (TBT Agreement) promote the international harmonisation of
food standards and set out certain rules on food safety, animal and plant health
standards. Under these rules, countries can have their own science-based set of
standards and regulations. The main objective of these standards and regulations is
to protect human, animal, plant life and health and not discriminate between the
countries where similar conditions apply.
The Codex Alimentarius is an international food code developed by the Codex
Alimentarius Commission (CAC), which was set up by the FAO and World Health
Organization (WHO).
The WTO SPS Agreement recognises the standards set by the CAC as the global
reference standards for consumers, food producers, processors, national food
control agencies, and anyone else involved in the international food trade.
India has been a member of the CAC since 1964. The Ministry of Health and
Family Affairs is responsible for framing government policies relating to food
standards, enforcement of food controls, and issues relating to the Codex
Alimentarius. The FSSAI is responsible for liaising with the CAC and co-
ordinating Codex activities in India, and created the National Codex Contact Point
(NCCP) for this purpose. The FSSAI has also set up the National Codex
Committee (NCC) and various shadow committees to review the agenda of the
CAC and finalise India's comments on various issues before sending it for
government approval.

Liability

29. Set out the legal requirements to establish the liability of producers

and suppliers for defective or contaminated food ingredients that cause
damage, in relation to tort and product liability.

FSS Act
The FSS Act imposes liability on manufacturers, wholesalers, packers, distributors
and sellers, as follows:
  The manufacturer or packer of a food article will be liable if the article does
not meet the requirements of the FSS Act and the associated rules and
regulations.
 A wholesaler or distributor is liable for any article of food that:
 is supplied after its expiry date;
 is stored or supplied in violation of the safety instructions of the
manufacturer;
 is unsafe or misbranded;
 does not identify the manufacturer;
 is stored, handled or kept in violation of the FSS Act or associated
rules and regulations; or
 is received by them with knowledge of it being unsafe.
 A seller is liable for any article of food that:
 is sold after the its expiry date;
 is handled or kept in unhygienic conditions;
 is misbranded;
 does not identify the manufacturer or distributors; or
 is received by them with knowledge of it being unsafe.
(Section 27, FSS Act.)
The FSS Act also sets out various offences that may lead to actions against a
producer or distributor. For example, it is an offence to render a food article
injurious to health in any of the following ways:
 Adding any article or substance to the food.
 Using any harmful article or substance as an ingredient in the preparation of
the food.
 Abstracting any constituents from the food.
 Subjecting the food to any other process or treatment, with the knowledge
that it may be sold or offered for sale or distributed for human consumption.
(Section 48, FSS Act.)

Consumer Protection Act 2019 (CPA)

The Consumer Protection Act 2019 (CPA) was adopted to strengthen consumer
safeguards in India, with certain provisions being notified in July 2020. The CPA
expressly introduces the concept of product liability and allows any injured
consumer to bring a product liability action before a district commission, state
commission, or national commission.
The CPA defines product liability as the responsibility of the manufacturer or
seller of any product or service to compensate any harm caused to a consumer by
the defective product or service.
A product manufacturer will be liable if the product:
 Contains a manufacturing or design defect.
 Deviates from manufacturing specifications.
 Does not conform to an express warranty.
  Fails to include adequate instructions for correct use to prevent harm, or any
warning regarding improper or incorrect use.
(Section 84, CPA.)
A product seller (who is not a product manufacturer) will be liable if:
 They exercised substantial control over the design, testing, manufacturing,
packaging or labelling of a product that caused harm.
 They altered or modified the product, and such alteration or modification
was the substantial factor in causing the harm.
 They provided an express warranty, independent of any express warranty
made by a manufacturer, and the product failed to conform to such warranty.
 The identity of the product manufacturer is not known, or if known:
 the service of notice or process or warrant cannot be effected on the
manufacturer;
 the manufacturer is not subject to Indian law; or
 the order, if any, passed or to be passed cannot be enforced against
the manufacturer.
 They failed to exercise reasonable care in assembling, inspecting or
maintaining the product.
 They failed to disclose the warnings or instructions of the product
manufacturer regarding the dangers or proper use of the product, and such
failure was the proximate cause of the harm.
(Section 86, CPA.)
30. Which defences are available to the producer and/or supplier to
avoid liability? For instance, is market-entry prior government approval
a legal defence against product liability and under which conditions?

FSS Act
Under the FSS Act, producers and suppliers can raise the defence that, due to
natural causes that are beyond the control of human agency, either:
 The quality or purity of a primary food article fell below the specified
standard.
 The constituents of a food article are not within the specified limits of
variability.
In these cases, the article will not be deemed to be unsafe, sub-standard or to
contain extraneous matter.
The following defences are also available:
 Product approval was granted by the authorities.
 The food article complies with food regulations and standards.
 A slight deviation from the food regulations is due to the sampling or testing
procedure.
 The deficiency was caused by the consumer's/buyer's negligence.
 The testing in laboratories was carried out after the food expiry date.
 The improvement notice was not received by the aggrieved party.
  The product is not defective.
 The consumer/buyer examined the product before purchasing it and
accepted it.
 Contractual limitations and warranties.

CPA
The following defences may be available to a product manufacturer, product seller
or service provider under the CPA:
 The buyer/user is not a consumer under the CPA.
 The product is not defective as defined by the CPA.
 The consumer did not suffer harm as a result of using the defective product,
as defined by the CPA.
 In a product liability action against the product seller, the product has been
misused or altered at the time of harm.
 The consumer, while using the product, was under the influence of alcohol
or any prescription drug that had not been prescribed by a medical
practitioner.
 Specific defences provided by the CPA for failure to provide adequate
warnings or instructions.
31. Which types of damage are generally compensated by civil courts in
food safety liability cases? For instance loss of value, reparation costs,
loss of revenue, and personal injury. Are punitive damages available?

FSS Act
Details on penalties, punishment and compensation are set out in sections 49 to 67
of the FSS Act.
The FSS Act imposes penalties for:
 Dealing with sub-standard food.
 Manufacturing for sale, storing, selling, distributing or importing
misbranded food.
 Manufacturing for sale, storing, selling, distributing or importing food
containing extraneous matter.
 Manufacturing for sale, storing, selling, distributing or importing
adulterants.
 Publishing misleading advertisements.
 Failing to comply with the directions of the Food Safety Officer.
 Manufacturing or processing food under unhygienic or unsanitary
conditions.
(Sections 50 to 58, FSS Act.)
The following offences are subject to imprisonment penalties:
 Manufacturing for sale, storing, selling, distributing or importing unsafe
food.
  Interfering with seized items.
 Furnishing false information.
 Obstructing or impersonating a Food Safety Officer.
 Carrying out business without a licence.
 Subsequent offences under the FSS Act.
(Sections 59 to 64, FSS Act.)
Any person who, whether by themselves or by any other person on their behalf,
manufactures for sale, stores, sells, distributes or imports any article of food for
human consumption that is unsafe and causes injury, grievous injury or death is
liable to:
 Imprisonment for not less than seven years (death), six years (grievous
injury), or one year (non-grievous injury), and a monetary fine.
 Pay compensation to the injured person within six months from the date of
occurrence of the incident.
(Sections 59 and 65, FSS Act.)
This may also lead to cancellation of their licence under the FSS Act.

CPA
Under the CPA, a consumer can:
 Bring a claim for compensation and punitive damages before the Consumer
Court for damage caused by defective food articles.
 File a criminal case for adulteration of food and drinks.
A product manufacturer/seller must compensate for any harm caused to a
consumer, including:
 Damage to property, other than the product itself.
 Personal injury, illness or death.
 Mental or emotional distress attendant to personal injury, illness or damage
to property.
 Any loss of consortium or other loss resulting from any of the above.

Contributor profile
Nusrat Hassan, Co-Managing Partner

Link Legal India Law Services

T +91 226 633 6791

F +91 226 633 6790
E [email protected]
W www.linklegal.in
Professional and academic qualifications. Qualified Attorney, Bar Council of
Maharashtra and Goa, India, 1993; Solicitor, England and Wales, 2005; Chevening
Scholar; Bachelor of Arts (Economics); LLB, Mumbai University
Areas of practice. Strategy; agricultural law; M&A; corporate and commercial;
dispute resolution; foreign direct investment and advisory.
Recent transactions
 Represented and advised Natura Yuva AG, a Switzerland-based company,
for establishing its business in India (through its subsidiary) consisting of:
 entering into farming contracts; and for the cultivation of medicinal
and aromatic plants, and entering into farming contracts; and
 engaging third-party contractors for the processing and extraction of
ingredients from medicinal and aromatic plants, and exporting the
extracted ingredients outside India.
 Represented and advised various companies in the fast-moving consumer
goods (FMGC) sector on various aspects of food law and compliance.
 Represented and advised the Sarvagram group of companies (involved in
providing technology and other solutions in the agriculture and other
sectors) on:
 raising capital (series A round); and
 their day-to-day business, including in relation to equipment lease
agreements and structuring its collaboration/synergy with other
entities providing similar/allied services.
 Represented and advised Alkem Laboratories Limited, a leading Indian
listed pharmaceutical company with global operations, in its acquisition of
an undertaking based in Sikkim from Cachet Pharmaceuticals Private
Limited.
 Advised Mitra Agro Equipments Private Limited (Mitra) and Omnivore
Capital on a strategic investment in Mahindra & Mahindra Limited (M&M)
and a supply contract for sprayers and other agricultural equipment with
M&M.
 Advised HZPC Holland BV, a Dutch global potato breeding company, in
negotiating a strategic joint venture with Mahindra for the development and
distribution of its seed varieties in India.
Languages. English, Hindustani
Professional associations/memberships
 Bar Council of Maharashtra and Goa.
 Bombay Bar Association (India).
 Senior Vice Chair, Agricultural Law Section of the International Bar
Association (IBA).
 Society of Indian Law Firms (SILF).
 International Division of the Law Society of England and Wales.
 Fellow (FCIArb), Chartered Institute of Arbitrators, UK (CIArb) and
Secretary of the CIArb, India Branch.
 Congress of Fellows, Centre for International Legal Studies (CILS), Austria.
 Co-Founder and Director, Indian Arbitration Forum.
 Former President of the Association of British Scholar (Mumbai Chapter).
 Empanelled with the Beijing Arbitration Commission.
  Indian Merchant's Chamber (IMC).
 Inter Pacific Bar Association (IPBA).
 International Chambers of Commerce (ICC).
Publications. India Business Law Journal; Kluwer International; Juris
Publishing.
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