Benefit Sharing Under the Biodiversity Act: Ensuring Fair and Equitable Outcomes

India is home to over 45,000 plant species and 91,000 animal species, many of which sit at the heart of centuries-old traditional knowledge held by local and indigenous communities. For decades, corporations and researchers – often from abroad – accessed these biological resources and the knowledge associated with them, developed commercial products, and profited substantially, while the communities that nurtured and conserved them got nothing. This practice, commonly called biopiracy, prompted India to build a dedicated legal framework around a concept that is central to the Biological Diversity Act, 2002: fair and equitable benefit sharing. Understanding how this framework operates, who it protects, and where it still falls short is essential for anyone studying intellectual property in the context of Indian biodiversity law.

The foundational idea: why benefit sharing matters 🔗

The Biological Diversity Act, 2002 (BDA) was enacted to fulfil India’s obligations under the Convention on Biological Diversity (CBD), which India signed at the Rio Earth Summit in 1992. One of the CBD’s three core objectives is the fair and equitable sharing of benefits arising from the use of genetic resources. The underlying logic is straightforward: the communities and ecosystems that conserve biological diversity over generations are the true custodians of that wealth. If someone profits commercially from those resources, the custodians deserve a share.

The Act frames its objectives around this principle from the outset. It specifically aims to secure sharing of benefits with local people as conservers of biological resources and holders of knowledge and information relating to the use of biological resources. The benefit-sharing mechanism under the Act is not a discretionary gesture – it is a legal obligation backed by an institutional structure, defined procedures, and penalties for non-compliance.

Who are the benefit claimers? 🔗

The Act defines benefit claimers as the conservers of biological resources, their by-products, and the creators or holders of traditional knowledge associated with those resources. This definition is significant because it includes not just formal institutions but also individuals, farmers, tribal communities, and local groups who have maintained and applied this knowledge over time. They do not need to hold any patent or registration to qualify – their longstanding relationship with the biological resource is itself the basis of the entitlement.

Local communities that have, for example, used a particular forest plant medicinally for generations, or farmers who have cultivated a native crop variety and preserved its genetic traits, fall squarely within the definition of benefit claimers. The Act establishes a three-tier institutional structure – the National Biodiversity Authority (NBA) at the national level, State Biodiversity Boards (SBBs) at the state level, and Biodiversity Management Committees (BMCs) at the local level – to ensure that benefit sharing reaches these communities in a meaningful way.

Section 21 and the benefit-sharing mechanism 🔗

Section 21 of the BDA is the core provision on benefit sharing. The NBA is empowered under Section 21 to determine the quantum and mechanism of benefit sharing arising from commercial utilisation or research on biological resources accessed from India. When the NBA grants approval for access to biological resources, it imposes terms and conditions specifically designed to secure equitable sharing. These terms are worked out through mutually agreed terms (MATs) between the applicant, the Authority, and relevant stakeholders including local communities.

Forms of benefit sharing 🔗

Benefits under the Act take multiple forms, both monetary and non-monetary. These include:

• Joint ownership of intellectual property rights – the NBA or identified benefit claimers may be made co-owners of a patent or other IPR arising from the commercial use of biological resources.
• Royalties and fees – monetary payments calculated as a percentage of the commercial value derived from the resource.
• Technology transfer – sharing of proprietary processes or technologies with benefit claimers or local communities.
• Capacity building – training and institutional support for local communities to improve their ability to manage and negotiate access to their resources.
• Monetary compensation – direct payments to benefit claimers where resources or associated knowledge were accessed directly from them.

In all other cases, monetary benefits are deposited into a Biodiversity Fund, which is used for the conservation and development of biological resources and the socio-economic development of areas from which those resources were accessed. The Act establishes Biodiversity Funds at the national level (Section 27), state level (Section 31), and local level (Section 43) to channel these resources appropriately.

Prior informed consent and mutually agreed terms 🔗

Benefit sharing does not operate in isolation – it is tied to two foundational procedural requirements: Prior Informed Consent (PIC) and Mutually Agreed Terms (MATs). Access to biological resources must be obtained with PIC, meaning the relevant community or authority must genuinely consent before any access takes place. The terms of benefit sharing are then negotiated and documented as MATs. The underlying principle of Access and Benefit Sharing is to ensure that access to biological resources and associated traditional knowledge is based on securing prior informed consent, finalising mutually agreed terms, and ensuring fair and equitable benefit sharing.

Applications for access are filed in specific forms with the NBA. Form 1 covers direct access to biological resources and associated traditional knowledge; Form 2 deals with transfer of research results; Form 3 addresses applications for intellectual property rights; and Form 4 handles third-party transfers. Each form triggers a process that includes BMC consultation, community notification, and determination of benefit-sharing terms.

Protecting traditional knowledge: the role of People’s Biodiversity Registers 🔗

One of the most practically important tools for implementing benefit sharing is the People’s Biodiversity Register (PBR). The PBR is a comprehensive record of local biological diversity including habitats, medicinal sources, food plants, folk varieties, and domesticated breeds. It is prepared by BMCs in consultation with local communities, and acts as documentary evidence of traditional knowledge that communities hold.

The PBR serves a dual purpose. First, it supports benefit-sharing claims by creating a verifiable record of who holds which knowledge. Second, it helps prevent biopiracy by establishing prior art – if a community’s traditional use of a plant is already documented in a PBR, no one can later claim a patent on that use as a novel invention. Till now, over 2,67,608 PBRs have been prepared across India, though concerns about quality, completeness, and scientific validation remain.

Section 18(4) and opposing biopiracy patents 🔗

The Act also gives the NBA a proactive role in combating biopiracy beyond India’s borders. Section 18(4) empowers the NBA, on behalf of the Central Government, to oppose the grant of intellectual property rights in any country outside India over biological resources or knowledge associated with India. This means that if a foreign entity files a patent in another country based on biological material or traditional knowledge originating from India, the NBA can formally challenge that patent application. This provision has been used in high-profile instances to challenge patents that would have effectively appropriated Indian biological heritage without any return to the communities from which that knowledge came.

Benefit sharing and intellectual property rights: Section 6 🔗

Where a person – Indian or foreign – seeks to apply for a patent or any other form of intellectual property protection based on research conducted on biological resources accessed from India, they must first obtain prior approval from the NBA. Section 19(2) of the BDA requires any person intending to apply for a patent in or outside India to make an application to the NBA in the prescribed manner, which then determines the benefit-sharing obligation as a condition of that approval.

The NBA may impose a benefit-sharing fee or royalty, or both, as a condition for granting approval to file the IPR application. It can also direct joint ownership of the resulting intellectual property rights with the NBA or identified benefit claimers. In regulating intellectual property rights, Section 6 of the Act mandates prior NBA approval for any application – domestic or foreign – for patents or other IPR based on inventions derived from biological resources accessed from India. This creates a direct legal link between the patent system and the benefit-sharing framework under the BDA.

Real-world application: examples in practice 🔗

The benefit-sharing framework has seen some documented real-world outcomes. In one case, the NBA collected a royalty amount from Bio India Biological for the export of neem to Japan, and transferred a part of that royalty to the local biodiversity body in Andhra Pradesh for planting neem saplings and creating awareness about biodiversity conservation. In another instance, PepsiCo India Holdings paid the Tamil Nadu Biodiversity Board ₹3.7 million to access a species of exotic seaweed being cultivated by local communities in southern Tamil Nadu. These examples show that the mechanism can function, though critics argue that the amounts and consistency of benefit sharing remain far below what is needed to meaningfully benefit communities.

The 2023 amendment and its implications for benefit sharing 🔗

The Biological Diversity (Amendment) Act, 2023 received presidential assent on July 5, 2023, and introduced significant changes to the benefit-sharing framework. The amendment aims to streamline regulatory approvals, decriminalise certain offences, and align the Act more closely with the Nagoya Protocol. Indian companies without foreign participation now enjoy a more simplified process, and several categories of practitioners – including AYUSH practitioners, vaids, and hakims – are exempted from access and benefit-sharing requirements for traditional uses.

However, the amendment has drawn criticism on the benefit-sharing front. The amended Act removes the direct role of local bodies and benefit claimers in determining mutually agreed terms, with negotiations now channelled through BMCs represented by the NBA rather than through direct community participation. Critics, including the Ministry of Tribal Affairs, argue this risks sidelining indigenous communities from decisions that directly affect their rights. The question of whether this realignment truly implements the Nagoya Protocol’s requirement for prior informed consent – or merely a consultation – remains a point of ongoing legal debate.

Challenges in implementation 🔗

Despite a well-designed framework, several practical challenges limit the effectiveness of benefit sharing in India. A CAG report on Andhra Pradesh in 2018 noted that even a decade after the state biodiversity board’s formation, it had not attained the level of preparedness necessary for implementing the Act, with only 75 out of 13,725 local bodies having prepared biodiversity registers. In 2019, the National Green Tribunal criticised 14 states for zero progress in creating biodiversity registers.

Many researchers, institutions, and companies are unaware of ABS requirements, leading to inadvertent violations. BMCs in remote areas often lack the training and resources to negotiate benefit-sharing agreements. The lack of standardised benefit-sharing formulas also means that outcomes are highly inconsistent across cases and regions. Digitising PBRs, strengthening BMC capacity, and integrating the Traditional Knowledge Digital Library (TKDL) with patent examination processes are among the reforms being discussed to address these gaps.

What do you think? If a pharmaceutical company develops a blockbuster drug derived from a plant species long used by an Adivasi community in Jharkhand, what form of benefit sharing – monetary royalties, joint IPR ownership, or something else – do you think would be most meaningful and enforceable? And given the 2023 amendments that reduce direct community participation in setting mutually agreed terms, do you think the current framework genuinely honours the spirit of prior informed consent as envisioned under the Nagoya Protocol?

References

1. https://lawblend.com/articles/biodiversity-conservation-act-in-india/
2. https://indiankanoon.org/doc/548841/
3. https://www.cbd.int/access-benefit-sharing
4. https://www.legalbites.in/environment-law/the-biological-diversity-act-2002-overview-of-access-and-benefit-sharing-provisions-1128830
5. https://grokipedia.com/page/National_Biodiversity_Authority
6. https://ebooks.inflibnet.ac.in/esp13/chapter/the-biological-diversity-act-2002/
7. https://prsindia.org/billtrack/prs-products/prs-legislative-brief-3940
8. http://nbaindia.org/uploaded/pdf/ABS_Factsheets_1.pdf
9. https://www.drishtiias.com/daily-updates/daily-news-analysis/pbr-and-biodiversity-management-in-india
10. https://abs.nls.ac.in/?page_id=219
11. https://india.mongabay.com/2020/04/india-bioresource-access-and-benefit-sharing-how-far-have-we-come/
12. https://www.khuranaandkhurana.com/2023/09/08/understanding-the-biological-diversity-amendment-bill-2023