Patanjali ordered to share a percentage of profits with Uttarakhand locals

By

Isabelle Crossley

Published
Dec 31, 2018

The government of Uttarakhand has ordered Ramdev of Patanjali to share part of its profits with local farmers after announcing that it would sign a memorandum of understanding (MoU) with Patanjali on December 6.

Patanjali and the Uttarakhand government have committed to signing a MoU in early 2019 that will see Patanjali source much of its raw materials from the state. However, the local government has now stated that it will order the Ayurvedic personal care business to pay Rs 2 crore ($301,000) out of its Rs 421 crore profit obtained from sourcing its raw materials in the state to farmers and local communities.

The order, given by the bench of Justice Sudhanshu Dhulia in Uttarakhand, was the first of its kind and will no doubt set a president for the future. The judge’s reasoning was that the United Nations Convention on Biological Diversity and the 2002 Biological Diversity Act both agree that communities own in part the natural resources of their locality.

Although Divya Pharmacy, part of Ramdev’s Patanjali empire, argued against the Uttarakhand Biodiversity Board (UBB) to the court and stated that it was not liable to pay, the judge fell on the side of the UBB. Stating that the area’s biological resources formed the main part of the brand’s products and that it was under an obligation to give effect to the United Nations Convention on Biological Diversity, Ramdev was ordered to pay.

This precedent is important for India’s booming Ayurvedic industry as many brands source their ingredients in India. Local farmers could benefit from further rulings under the United Nations Convention on Biological Diversity.