2026 | Vol 2(2) | February

The Biological Diversity (Amendment) Act, 2023 represents a monumental shift in India's environmental jurisprudence. Enacted to modernize the foundational Biological Diversity Act, 2002, the 2023 amendment seeks to reconcile the competing demands of conservation, industrial growth (specifically the USD 300 billion bioeconomy goal), and the traditional rights of local communities.

Context and Legislative Intent

The original 2002 Act was born out of India’s commitment to the United Nations Convention on Biological Diversity (CBD) and the Nagoya Protocol. Its primary goal was to prevent "biopiracy"—the unauthorized use of India's biological resources by foreign entities without sharing the benefits with the indigenous people who protected them.

However, two decades of implementation revealed significant bottlenecks. Domestic industries, particularly the AYUSH (Ayurveda, Yoga, Unani, Siddha, and Homeopathy) sector and research institutions, complained of "compliance fatigue" and bureaucratic hurdles that stifled innovation. The 2023 Amendment was introduced to:

Encourage cultivation of medicinal plants to reduce pressure on wild forests.

Streamline research and patent application processes.

Decriminalize procedural lapses to promote "Ease of Doing Business."

Clarify the role of foreign-controlled Indian companies.

Key Definitions and Expanded Scope

The Amendment introduces and refines several critical terms to provide legal clarity:

Codified Traditional Knowledge: This refers to knowledge derived from authoritative texts (like those specified in the Drugs and Cosmetics Act, 1940). This distinction is vital because the Act now treats "codified" knowledge differently from the "oral" knowledge held by indigenous tribes.

Derivatives: The definition of biological resources was expanded to explicitly include "derivatives"—naturally occurring biochemical compounds—ensuring that the legal net covers by-products even if they don't contain functional units of heredity.

Foreign-Controlled Companies: One of the most significant changes is aligning the definition of a "foreign company" with the Companies Act, 2013. Previously, any company with even a single foreign shareholder was treated as a foreign entity. Now, only those controlled by foreign entities are subject to the stricter National Biodiversity Authority (NBA) approval process.

The New Regulatory Architecture

The Act maintains the three-tier structure but reshuffles the powers and responsibilities of the authorities involved.

National Biodiversity Authority (NBA)

The NBA's composition has been expanded to 16 ex-officio members, including representatives from various Union Ministries. Its role has shifted toward high-level oversight and regulating foreign access. Crucially, the NBA now facilitates "fast-track" patent applications. For Indian entities, approval is no longer required at the time of applying for a patent; they only need to register with the NBA and seek approval before the commercialization of the invention.

State Biodiversity Boards (SBBs)

SBBs have seen their powers solidified. Indian entities seeking commercial utilization of bio-resources must now provide "prior intimation" to the SBB. The SBBs are also tasked with determining the Access and Benefit Sharing (ABS) fees for domestic users, a task previously plagued by ambiguity.

Biodiversity Management Committees (BMCs)

Located at the local body level (Panchayats and Municipalities), BMCs are the custodians of the People’s Biodiversity Registers (PBRs). While the 2023 Act reaffirms their importance, critics argue that the amendment centralizes power, as the NBA now negotiates benefit-sharing terms on behalf of the BMCs in many instances.

Access and Benefit Sharing (ABS): The Core Change

The most controversial aspect of the 2023 Amendment is the exemption of certain groups from the ABS mechanism. Under the 2002 Act, almost all commercial users had to share a portion of their profits with local communities.

Exemptions from ABS:

AYUSH Practitioners: Registered medical practitioners of the Indian system of medicine are now exempt from sharing benefits when using bio-resources for their practice.

Codified Traditional Knowledge: Users of traditional knowledge that is documented in ancient texts (codified) are exempt from ABS requirements.

Cultivated Medicinal Plants: To discourage the "stripping" of forests, plants grown on private land are exempt. A Digital Portal (launched in 2026) now issues "Certificates of Origin" to verify these are cultivated, not wild.

New Fee Slabs (2025 Regulations):

To provide transparency, the government notified turnover-based ABS rates:

Below ₹5 Crore: 0% ABS.

₹5 Crore to ₹50 Crore: 0.2% of gross ex-factory sales.

Above ₹250 Crore: 0.6% of gross ex-factory sales.

High Conservation Value Resources: For species like Red Sanders or Sandalwood, the ABS can be as high as 5% to 20% of the auction price.

Decriminalization: From Jail to Fines

Perhaps the most dramatic shift is the removal of imprisonment as a penalty.

Old Provision: Violations could lead to up to 5 years in prison.

New Provision: All criminal penalties are replaced with monetary fines.

Penalty Range: Fines start from ₹1 lakh and can go up to ₹50 lakh. If the damage caused is higher, the fine can be increased proportionally.

Adjudication: A government-appointed Adjudicating Officer (of the rank of Joint Secretary) now conducts inquiries and imposes fines, moving these cases out of the traditional court system.

Critical Analysis: Pros and Cons

The 2023 Amendment has polarized environmentalists and industry leaders.

The Positive Impact (Pro-Industry/Research)

Incentivizing Research: By removing the need for prior NBA approval for Indian researchers and patent applicants, the Act reduces wait times from years to months.

Boosting AYUSH: The exemption for AYUSH practitioners recognizes the cultural heritage of Indian medicine and reduces the cost of traditional healthcare.

Sustainable Cultivation: By exempting cultivated plants, the Act creates a commercial incentive for farmers to grow medicinal herbs, potentially increasing forest cover.

The Concerns (Pro-Conservation/Indigenous Rights)

Dilution of Community Rights: Critics argue that exempting the AYUSH industry—which includes multi-billion dollar corporations—deprives local communities of vast sums of money that were meant for conservation.

Definition of "Codified": Since most Indian traditional knowledge is documented in some form, a broad interpretation could mean that almost no one has to pay ABS, rendering the concept of "benefit sharing" toothless.

Weak Deterrence: Environmentalists fear that replacing jail time with fines will be seen as a "license to pollute" or "cost of doing business" for large corporations.

The "Foreign Control" Loophole: By relaxing the definition of foreign entities, there are concerns that domestic subsidiaries of MNCs might exploit resources with less oversight.

Conclusion

The Biological Diversity (Amendment) Act, 2023, is a pragmatic attempt to align India’s conservation laws with its economic aspirations.

However, its success depends entirely on the Rules and Regulations (notified in 2024 and 2025) and the transparency of the new digital monitoring systems. To prevent the marginalization of indigenous communities, the government must ensure that the "codified knowledge" exemption isn't used as a loophole by large-scale commercial extractors.

Ultimately, the Act seeks a "Middle Path"—protecting nature not by locking it away, but by creating a regulated, profitable, and sustainable ecosystem for its use.

References

Gazette of India: https://egazette.gov.in/WritereadData/2023/247815.pdf