Growing at a compound annual growth rate (CAGR) of about 15%, the agrochemicals sector in India is likely to cross Rs. 25,000 crore mark by 2015, apex industry body ASSOCHAM said today.

The Indian agrochemicals market is currently poised at over Rs. 16,000 crore, according to a study titled, ‘Indian Market for Agrochemicals,’ released by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

“Growing awareness about the positive impact and benefits of agrochemicals on the agri-produce and the need for crop protecting and growth augmenting chemicals amid farmers together with growing shortage of farm labour, need for self-sufficiency in food grain production, growth in organized retail segment and thriving domestic horticulture and floriculture industries are fuelling the growth and increased usage of agrochemicals in India,” said  D.S. Rawat, secretary general of ASSOCHAM while releasing the findings of the study.

“There is a huge growth potential for foreign investments in India’s agrochemicals market and the multinational companies operating in the sector can witness five to ten times more annual growth in India as compared to that in other countries thereby making India a global hub for agrochemicals,” said  Rawat. “Rapidly growing population is constantly putting huge pressure on arable land thereby making the use of agrochemicals inevitable to increase farm production in India.”

Besides, lower availability of natural fuels is also a significant reason behind growth of agrochemicals as the usage of the same can help boost agri-production, according to the ASSOCHAM study.

Considering the rampant growth prospects of agrochemicals, there is an urgent need to groom the farmers and inform them about their usage and application in terms of its quantity depending upon the nature of crops.

Indian agrochemical companies should leverage from their wide distribution network, superior abilities in process optimization and low-cost manufacturing skills, said ASSOCHAM. Besides, Indian companies in the sector should also increase their investment in research from current level of about two% to at least eight to 10% to spur its exports and be more competitive in the global scenario, said ASSOCHAM.

Abundance of low-cost agrochemical products from China, high inventory owing to Indian farms’ dependence on monsoons, counterfeit products and long credit periods to farmers are certain key problems faced by India’s highly-fragmented agrochemicals market.

In terms of agrochemicals production, India ranks fourth in the world after USA, Japan and China respectively. Besides, the global agrochemicals industry is growing at about 12% CAGR and is likely to cross Rs. 13 lakh crore mark from the current level of about Rs. 8.5 lakh crore, according to the ASSOCHAM study.

As per an estimate, crops worth about 20 billion dollars is lost due to lower usage of pesticides each year. ASSOCHAM has thus suggested judicious use of pesticides to prevent crop losses, reduce input costs and provide economic benefits to the farmers.