PLI scheme for Agrochemicals would encourage indigenous manufacturing and reduce import dependence: CCFI
20 January 2023, New Delhi: Crop Care Federation of India (CCFI) has again made a representation to the Secretary of Chemicals, Ministry of Chemicals and Fertilizers earlier this week, emphasizing the need to include agrochemicals, which is a major input in agriculture, under Production Linked Incentive (PLI) Scheme.
By including agrochemicals under Production Linked Incentive (PLI) Scheme, Indian Government could give a strong push to the local agrochemical players in their manufacturing ecosystem, catering to the domestic market as well as exports. Indigenous manufacturers have the technical capability and unutilized capacity for quality manufacturing of formulations in liquids, granules, wettable powders, etc.
Mr. Harish Mehta, Senior Advisor at CCFI said, “The surge in imports is estimated to reach over ₹15,000 crores in the current year in the absence of the PLI scheme. As per industry estimates almost 55% of the imports are readymade formulations imported by MNCs and merchandising traders not only beyond their captive consumption but majorly for resale at exorbitant margins to exploit the farmers with proprietary monopolistic products which need to be stopped.”
“We are unable to quantify the correct purity profile in imported formulations resulting in the supply of substandard material, and the possibility of expired stock with a toxic profile. The industry expects an investment of Rs. 12,000 crores in the next 3 years if the proposal is implemented as per Indian Industry recommendation. CCFI finds that the steps taken by the Government of India for PLI Scheme in various other sectors a progressive and commendable steps. However, the parity at 10% custom duty on imports both on technicals and formulations import is a disincentive for any manufacturer, and therefore the government is logically considering a delta by imposing minimum 20% customs duty on technical & 30% on import of readymade formulations”, mentioned Mr. Mehta.
CCFI has submitted a dossier that includes:
1. Agrochemical Intermediates: 35 intermediates with their market size, potential, and future growth. This list is based on the real requirements of the Indian active ingredients manufacturing industry. There is no change in the annexure resubmitted on 22nd July 2022.
2. Agrochemicals imported in India as technicals: 81 technical bifurcated in insecticides, herbicides, and fungicides are mainly imported by MNCs.
3. Agrochemicals imported in India as Formulations: 89 Readymade Formulations are being imported which can be manufactured in India.
4. List of Technical imported in India: 31 technical imported despite having indigenous manufacturing capacities. For this, 63 companies in insecticides, 78 companies for herbicides, and 46 companies for fungicides have indigenous manufacturing capacity.
Industry experts are of the view that agrochemical has to be a new sector in focus besides the 14 sectors where PLI Scheme has been announced. This would encourage private investment and the Government should look at building upon the success of the program.
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