Crop ProtectionAgriculture Industry

Immediate Need for Prioritising Agrochemicals Under PLI Scheme

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06 March 2024, New Delhi: Crop Care Federation of India (CCFI) an apex association of indigenous manufacturers is extremely appreciative of the initiative taken by the Government of India, for achieving “Self Reliance” to achieve a formidable leadership position in the global competitive market through “Make In India”.

Harish Mehta, Senior Advisor, Crop Care Federation of India

India has the capacity and capability for successfully manufacturing many complex chemistries and produced large volumes of Technical-grade products over the last many years.

Harish Mehta senior advisor of CCFI said “Agrochemicals are part of the Agriculture Ministry along with portfolios of Fertilizers and Petrochemicals but as you would appreciate agrochemicals is a niche upcoming sector and cannot be equated with fertilizers and petrochemicals. We feel that this is the only sector where exports at Rs 44, 000 crores (USD 5.5 billion) are higher than domestic consumption and therefore it should be given for right impetus, independent of petrochemicals. Today India is the highest exporter of agrochemicals.”

Though India ranks 2nd in the World agricultural production, we are 4th largest manufacturer of agrochemicals after USA, China and Japan. Food and nutrition which are the needs of the growing population require a sustainable approach that puts thrust on an increase in production against the background of lower yields and decreasing farm sizes.

With the emergence of the newer pest, India remains one of the lowest in terms of per capita consumption of pesticides at 380g/ Ha with potential for significant growth.

The use of crop protection chemicals can increase crop productivity by mitigating crop losses due to pests and diseases. Insecticides are the largest Sub- Segment of agrochemicals with 55% market share whereas herbicides constitute 21% as the fastest growing segment because of the non-availability of skilled labor on all crops of economic importance like cotton, paddy, soybean, sugarcane, vegetables, and wheat, besides Cereal & Fiber crops, Oil seeds, Horticulture, and plantations.

In the dossier submitted to GOI, it was stated that Agrochemicals are extremely vital for food security and also for helping farmers double their income. The Agrochemical industry is now categorized as a Champion Sector and should be considered for inclusion under the PLI scheme for indigenous manufacturers on priority.

Since there has been a surge in imports CCFI members have suggested a minimum 30% customs duty be imposed on the formulation imports, on products currently manufactured in India that are out for the patent period. For products that are currently not manufactured in India this duty may be made applicable as soon as any company starts manufacturing in India.
A minimum 30% customs duty may be on the imports of Technical Grades agrochemical products that are already being manufactured in India

A minimum 20% customs duty may be imposed on the import of other Patent Technical grade agrochemical products to encourage Indian manufacturers to launch new molecules.

Expressing apprehension Harish Mehta said “Imports of such products from China end up in non-utilization of existing capacities of Indian industry which is estimated at 45% for liquids, granules & Wettable powders. Storage chemicals are another category requiring support. It must be ensured that imports be allowed only for captive consumption by the importer and not for trading or Merchant Sale”

We at CCFI have prepared a list of Agrochemicals & Intermediates based on the recommendation of our ”Steering committee members” who have vast industry experience and passion for promoting indigenous industry.

Support is also requested for providing Investment allowance, lower interest costs, and a moratorium of two years for the companies who are investing more than Rs. 25cr. for manufacturing, in the agrochemical sector which would be import substitutes of Technical/ Formulation grade as well as Intermediates.

It may please be noted, that the cost of agrochemicals to the farmers is about 4% of the total value of the produce, whereas, it reduces crop losses between around 25 to 30% during the crop cycle and storage

In conclusion, Agrochemicals as a champion sector should be given priority for inclusion under the PLI scheme to help Indian manufacturers emerge as global champions. Inclusion under the PLI scheme would generate employment directly in factories besides field personnel in educating the farmers

Fresh investment of Rs. 12,000 crores is expected by Indian companies in the next 3-5 years if this scheme is immediately approved This would lead to fulfilling the PM’s vision of building an Atmanirbhar Bharat

Mr Mehta concluded, “Impetus to Make in India as only manufacturing companies registered in India will be eligible. As it’s evident PLI incentive to be given to those corporates undertaking manufacturing in India and NOT on imported formulations, which entail no value addition, employment or increased Indigenous production.”

Also Read: Indian Cotton Prices and Outlook for March 2024: A Mixed Bag for Cotton Producers

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