"The government has banned the Mahyco company with immediate effect," Agriculture Commissioner Umakant Dangat told IANS Thursday, when asked about the cancelling of the company's licence.
The Controller and Director, Commissionerate of Agriculture (Inputs and Quality Control), the licensing authority, took the action late Wednesday under the Maharashtra Cotton Seed Rules, 2010.
The ban comes in the wake of widespread complaints against the company accusing it of supplying inferior quality seeds which aggravated the agrarian crises in rural Maharashtra and spurred suicides among farmers.
Last month the issue was discussed in the state legislature and Agriculture Minister Radhakrishna Vikhe-Patil then proposed a ban on the sale and distribution of the Bt seeds.
"It is a bold move by the agriculture minister and proves the government has not succumbed to MNC pressures," Kishore Tiwari of Vidarbha Jan Andolan Samiti (VJAS) told IANS.
VJAS has sought a similar ban on 28 companies sub-licensed by MMB for selling the BT cotton seeds, and replacing them with traditional Indian cotton seeds, Tiwari said.
India is now the largest cultivator of Bt Cotton, jumping from 400,000 hectares to 12,600,000 hectares now after it was approved for commercial cultivation in 2002 by the regulator, Genetic Engineering Approval Committee of the union environment ministry.
Certain BT cotton variants are suspected of toxicity, damaging public health and environment, and agriculture activists have been demanding a complete ban on BT technology in India.
Protests have marked the 10th anniversary of the introduction of Bt cotton in the country this year with angry farmers and social activists asking policy makers for a comprehensive review of the technology that was meant for irrigated areas but was pushed in all cotton-growing states.
Tiwari said that while the Indian cotton seeds cost much lower, they are ready for plucking within five months, while the BT cotton takes upto 200 days.
"Indian cotton seeds greatly reduces the demand and need for additional inputs like water, fertilizers, pesticides and other nutrients," he added.
A top state agriculture department official, requesting anonymity, said henceforth, all trading activities of the company shall be illegal and any violations could attract criminal action.
The government has taken precautions to ensure that the ban is implemented without legal hurdles in case the company challenges it.
"We have already filed caveats in the Bombay High Court and have given them sufficient opportunities to present their side of the case," the official added.
Following the ban, there were reports of raids being carried out on some stockists in eastern Maharashtra.