UPDATE 3-India delays GM vegetable start for further tests

* India to wait for consensus on GM food

* Decision boosts ruling party's farmbase

* Indian public wary of GM seed companies

(Adds detail)

By Bappa Majumdar

NEW DELHI, Feb 9 (Reuters) - India has postponed the launch of its first genetically modified (GM) vegetable, saying it would adopt a cautious approach and wait for more scientific studies on the impact of the new variety of eggplant.

The decision contrasted to China, which last year approved the pest resistant strain of genetically modified rice and phytase corn as safe, and wants to speed up the commercialisation of some GM strains to address potential food shortages.

New Delhi's stance could come as a blow to seed producers such as Monsanto Co (MON.N) looking to enter India's huge market in GM food crops and where the company has substantial investment, including for research and development.

"The moratorium will be in place until all tests are carried out to the satisfaction of everyone ... If that means no start of production, so be it," Environment Minister Jairam Ramesh told reporters on Tuesday.

Until the tests are done, India should build a broad consensus to use GM technology in agriculture in a safe and sustainable manner, he said.

Ramesh said though some countries cultivated GM foods, that was not a good enough reason for India to follow suit.

The decision is seen as boosting the Congress party among its main farming vote base, much of which is fearful of GM use, and comes despite pressure from Farm Minister Sharad Pawar who supported introducing the modified "BT Brinjal", or eggplant.

It also signals Congress's leading position within the ruling coalition made up of difficult allies such as Pawar's Nationalist Congress Party. The Congress and Pawar, who also controls the food portfolio, are involved in a blame game over rising food prices.

"The government has been sensitive to public opinion and they have defused an upsurge among its farmer voters by this decision. It has more to do with politics, not any scientific reason," political commentator Amulya Ganguli said.

POPULAR OPPOSITION

Ramesh conducted public debates across the country to test the support for GM foodcrop. Most of these meetings saw strident opposition to the idea. Most non-Congress-ruled state governments, including major eggplant-growing areas, were opposed.

"They killed three birds with one shot. They have defused the public sentiment against them, number two is the political opposition was neutralised and three they prevailed over Sharad Pawar," said N. Bhaskara Rao of the Centre for Media Studies.

A government panel last year supported introduction of genetically modified eggplant, but the government said it would consult experts and farmers before accepting the recommendations.

"It is my duty to adopt a cautious, precautionary, principle-based approach," Ramesh said.

Ramesh said fears of the safety of the crop stemmed in part from a negative public perception of Monsanto, which owns 26 percent of the Indian company Mahyco, involved in the development of the modified eggplant.

"Very serious fears have been raised in many quarters on the possibility of Monsanto controlling our food chain if (GM eggplant) is approved," Ramesh said.

Advocates of genetically modified crops argue such varieties can easily increase food supply for India's 1.2 billion people and protect farmers as GM crops can withstand adverse weather and increase output significantly.

"Nearly 1.4 million (eggplant) farmers will be deprived from (GM) technology," said Bhagirath Choudhary of the South Asia office of International Service for the Acquisition of Agri-biotech Applications (ISAAA), a GM advocacy group.

"This would amount to a net loss of $330 million per year to Indian brinjal farmers".

But opponents say GM seeds can be a hazard for the environment and public health, and must be tested throughly before they are commercially used. (Additional reporting by Ratnajyoti Dutta and C.J. Kuncheria; Editing by Krittivas Mukherjee and Jerry Norton)