The agrochemical industry in India is well poised to reach US $18.1 billion by 2025. Sustaining its momentum, industry will ride on the growth drivers such as significant R&D activities, policy reforms related to trade, marketing, production, manufacturing, product registration, and IPR. The widespread distribution network, and a robust product pipeline are critical too for its growth.

Agrochemicals will contribute to economic growth through industrial growth directly and improvements in agricultural output indirectly, says Ajay Kakra, Executive Director, Agriculture, and Natural Resource, PwC.

“Both production and exports of agrochemicals have grown substantially in the last decade. India is the 4th largest producer of agrochemicals globally and 50% of the growth witnessed by the agrochemical companies in India (in the last 5-6 years) has been driven by exports. India is a net exporter of agrochemicals (13th largest) and exports stood at US $1.8 bilion in 2018-19 compared to US $510 million in 2010-11. Production of agrochemicals has grown at a CAGR of around 5% in the last 5 years.”

RG Agarwal, Chairman FICCI - Crop Protection Committee and Group Chairman, Dhanuka Agritech points out the extremely low usage of pesticides in India as compared to global standards. “Use of pesticide in India is< 0.34 kg/ha as compared to China (13.07 kg/ha), Japan (11.84 kg/ ha), and Brazil (5.94 kg/ha).”

Explaining the reasons behind the inordinate delay in the introduction of new products in India, Agarwal opines further, “New products are not easy to get and there is lack of enough basic research in India. There is 5 to 7 year’s time for registration of new products and investment of Rs. 30 – 50 crore. New products are not given intellectual property protection. There is a proposal to increase import duty from 10% to 20% on formulation imports. As a result, there is a dependency on MNCs or Japanese companies who invest around Rs. 2,000 crore and 10 to 12 years on one new molecule research. World over, China has 950+ registered molecules, the USA has 800+, Pakistan and Vietnam have 450+, whereas, India has only 292 molecules.”

Jaidev Shroff, Global CEO, UPL Ltd, says, “Self-reliance and improved farmer income is a huge challenge before us as we slowly move towards self-sufficiency. In this context, we are aiming at bringing technologies to make the farmers self-reliant. Financial inclusion will help farmers to live normal lives without any dependence on subsidies. There is a huge opportunity for agriculture and as the economy grows, the role of Agri products in the country's GDP will increase too. I am sure the demand for agrochemicals will increase dramatically.”

Despite the COVID-19 pandemic and reverse migration, the agriculture sector has done well comparatively, says Rahoul Sawani, Managing Director-South Asia, Corteva Agriscience.

“The learnings from COVID-19 include sustainability of production capacities and supply chains. Agrochemicals will play an important role in tomorrow’s agriculture and we need to be in sync with farmers’ expectations. We must look at basic resources such as water depletion, land quality, and the environment. We need a policy that helps us to gain access to the domestic market and be able to invest because of regulatory certainties,” added Sawani.

“India can do much more in terms of modernizing agriculture. As soon as the local market starts upgrading, the opportunities for supplying to the global market will be enormous. The local production will depend on the ability to provide sustainability, supply chain management, and CO2 reduction. Unfortunately, India is still dependent on China for API which makes the global companies rethink. There is a need for a long-term policy,” mentions Simon-Thorsten Wiebusch, Co-Chairman, FICCI Committee on Crop Protection Chemicals & Chief Operating Officer, Bayer CropScience.

The need to produce more food is a huge challenge in a situation when land is getting eroded and there is acute water scarcity globally, says KC Ravi, Chairman, CropLife India & Chief Sustainability Officer, Syngenta India Limited.

“Preserving natural resources while taking care of rural communities besides increasing the trust of stakeholders by delivering a positive innovation model that has a long-lasting impact on business and life,” commented Ravi.

As per Jay Byrne, president, V-Fluence, “Globally coordinated, well-funded anti-conventional agriculture campaign seeded in 2008-2009, launched in 2012 and which has extended to 2020+ merging with growing anti-US and anti-capitalism. Sentiments are to disparage non-organic, ‘big ag’ and technology-linked production systems. Growing anti-corporate allegations of corruption and “greenwashing” claims around risks “green chemistry” solutions involving biological alternatives coming from corporate-driven gene editing, biocides.”

Way forward

Experts call for ‘Ease of Doing Business in Indian agrochemicals sector. Most of them agree that the government should speed up the issuance of guidelines for the usage of drones in agriculture and Artificial Intelligence. They stress if changes aren’t done in ‘Pesticides Management Bill 2020’ as per scientific recommendation, MNCs won’t invest in spite of their intent to shift their base from China and may shift to other Asian countries like Vietnam, Malaysia, Indonesia, and Thailand.

Kakra believes that the regulatory ban has impacted the industry over the last few years. He explains, “For instance, the proposed ban on 27 products in 2020, is expected to impact the exports worth around US $0.5 billion. Over the past decade, India has developed a unique advantage by mastering low-cost manufacturing of agrochemicals, driven by the availability of labor, tax benefits, etc. Yet inadequate use of agrochemicals can lead to around 25-30% yield losses in the medium to long term. Scientific, timely, and sustainable use of agrochemicals is essential to ensure food security and enhance farmer income.”

Highlighting the importance of farmers’ education, Union MoS of Agriculture and Farmers Welfare, Parshottam Rupala calls for judicious use of pesticides and clearing misconceptions through authentic information.

“It is important to tell people about the necessity of pesticides as seen in case of the latest locust attack. We used technologies including helicopters and drones for the spray to counter locusts while reviewing the earlier laws. In the same way, we need to be realistic in approach,” added Rupala.

Post-COVID, many global manufacturers of agrochemicals are contemplating a move of shifting their production from China to India and other countries. In this context, India has sufficient availability of technically trained manpower and underutilized production capacity to fulfill local as well as global demand. The various government schemes such as Make in India, Start-up India, and Production Linked Incentive (PLI) scheme are expected to play a crucial role in transforming India into a global agrochemical hub.