Section 40: Normally Traded Commodities

In one line

Section 40 is the exemption that keeps the Act out of the ordinary trade in rice, wheat, spices and timber, and the 2023 amendment widened it to cultivated medicinal plants.

In exam wording: section 40 of the Biological Diversity Act 2002, as substituted in 2023, provides that notwithstanding anything contained in the Act, the Central Government may, in consultation with the National Biodiversity Authority, by notification in the Official Gazette declare that all or any of the provisions of the Act shall not apply to biological resources when normally traded as commodities, or to items derived from them including agricultural wastes as notified, and cultivated medicinal plants and their products for entities covered under section 7 registered as per the regulations made or as may be prescribed; with a proviso that no exemption shall be made for the activities referred to in section 6(1) and 6(2).

Why the exemption is necessary

Without it, every export of rice, every sale of turmeric and every consignment of timber would be commercial utilisation of a biological resource, and the Act would become a licensing regime for Indian agriculture and trade. Section 2(f) already excludes conventional breeding and traditional agricultural practices from the definition of commercial utilisation, but that exclusion is about the practice, not about the commodity.

Section 40 removes the commodity.

Broken down

Who may declare. The Central Government, in consultation with the National Biodiversity Authority, by notification in the Official Gazette.

What may be exempted. All or any of the provisions of the Act; so the exemption can be partial.

In relation to what. Three classes.

1. Biological resources normally traded as commodities. This is the original limb and is the basis of the notification listing the resources so traded.

2. Items derived from them, including agricultural wastes as notified. Added in 2023.

3. Cultivated medicinal plants and their products, for entities covered under section 7, registered as per the regulations made or as may be prescribed. Also added in 2023, and it operates only for Indian entities and only if they are registered.

What may never be exempted. The proviso: no exemption for the activities in section 6(1) and 6(2), that is, the requirement of prior approval before the grant of an intellectual property right and the Authority's power to impose a benefit sharing fee, royalty or conditions.

Why that proviso matters. It means that even a wholly exempt commodity cannot be patented free of the Act. The gate on intellectual property never opens.

The relationship with section 7

Section 7's proviso, inserted in 2023, exempts cultivated medicinal plants and their products from the intimation requirement, subject to a certificate of origin from the Biodiversity Management Committee under section 7(2).