Following criticism and uncertainty regarding the Indian Biological Diversity Act, 2002 (the Act), the Government of India introduced its first amendment, which became effective on April 01, 2024, along with corresponding changes to the Biological Diversity Rules. The amendments aim to clarify the procedures for accessing and using biological resources from India and appear to provide meaningful relief to those engaged in research and the commercial use of bioresources.
A key change for Indian companies is the amendment to Section 3(2)(c)(ii), which now reads: “a body corporate, association or organisation incorporated or registered in India under any law for the time being in force, which is controlled by a foreigner within the meaning of clause (27) of section 2 of the Companies Act, 2013”. Whether an Indian company with foreign shareholding falls within the amended Act, 2024 must therefore be assessed by reading Section 3 of the Act with Section 2(27) of the Companies Act, 2013. This is significant for Indian private companies because under the earlier provision, even marginal foreign shareholding could bring them within Section 3(2), often causing financial loss and substantial delays in patent grants for applications filed in their own name or as co-applicants.
For a person or body corporate covered under Section 3(2) of the Act, the amended Act prescribes different procedures depending on the purpose for which the biological resource is accessed. Applications for access for research, bio-survey, or bio-utilisation are therefore treated separately from applications for commercial utilisation.
For Indian applicants, prior permission from the State Biodiversity Board (SBB) is required to access bioresources for commercial utilisation, except in the case of codified traditional knowledge; cultivated medicinal plants and their products; and local people and communities of the area, including growers and cultivators of biodiversity. To claim the exemption for cultivated medicinal plants used for commercial purposes, a certificate of origin from the Biodiversity Management Committee is required. The amendment also exempts vaids, hakims, and registered AYUSH practitioners from the SBB approval requirement. No prior permission is required from an Indian national to access bioresources for research, bio-survey, or bio-utilisation.
On the research front, the amended Act introduces separate approval requirements for different activities. Where an Indian individual or entity undertakes a research project and, based on the results obtained, if a Section 3(2) entity carries out further research, only registration of the transferee with the NBA is required. However, prior approval from the NBA is needed if the Indian individual or entity intends to share or transfer the research results to a person/entity falling under Section 3(2) of the Act, whether for commercial or non-commercial purposes. In effect, Indian individuals and entities may conduct research independently or with other Indian entities without approval or registration, but the involvement of a Section 3(2) entity may trigger additional requirements, depending on how the research results are shared or transferred.
If a person covered under Section 3(2) of the Act intends to use research results obtained from Indian researchers to secure intellectual property rights (IPR), prior approval from the NBA is mandatory. The same applies where such a person seeks IPR for an invention based on research or information, including digital sequence information relating to Indian biological resources. This approval must be obtained before the grant of IPR, even if the Indian bioresource was sourced from repositories outside India. As a result, it seems that for non-Indian applicants, or in cases involving a foreign-controlled body corporate, the research and IPR process can be more complex and time-consuming.
The amendment to the Act is especially helpful for Indian nationals seeking IPRs, particularly patents, for inventions arising from research involving Indian biological resources. Previously, the stringent NBA approval process and the complexity of Access and Benefit Sharing (ABS) agreements often delayed patent grants. Under the amended framework, obtaining NBA permission before the grant of IPR has been simplified. Indian nationals now need only register in the prescribed manner before the grant of IPR and obtain NBA approval at the commercialisation stage.
Overall, the amended Act brings greater clarity to the rules governing access to and use of Indian bioresources. However, the NBA may need to revisit and simplify the model ABS Agreement to address practical difficulties that arise when its terms conflict with institutional policies. The model agreement may also include more balanced provisions for foreign nationals to support international research collaboration and cross-border exchange of bioresources.
Authors – Manisha Singh (Partner) & Vijaya Choudhary (Managing Associate)