Finance Minister Nirmala Sitharaman is set to present the first comprehensive Union Budget of the Narendra Modi 3.0 administration on July 23, 2024. ICN is presenting here the industry's expectations from the first Budget of Modi 3.0: 

S. K. Chaudhary, Founder Director, Safex Chemicals Ltd.

Given the increasing threat to crops because of adverse weather conditions arising from climate change, one looks forward to a robust rise in the R&D outlays so that both private and government institutes are motivated to develop climate-resistant crop varieties.

The crop rotation system should also be incentivised, whereby more farmers are encouraged to adopt this strategy. Training and awareness programmes can be launched so the farming community realises the importance of rotating crops, which can help in conserving the water table, enhancing soil fertility and minimising erosion. Moreover, crop rotation will be useful in raising the overall per-acre productivity of farmland.

The GST rate of 18% on plant protection chemicals must also be lowered to 12% at the least, although a minimal rate of 5% would be more beneficial for the agri sector and consumers at large as it will reduce cost to grow crops.

Since climate change challenges are only growing worse by the day, we believe the Budget should look at across-the-board measures that will help in combatting the menace on every front. Therefore, the Finance Minister should focus on steps that promote climate-resilient farming practices and crop rotation to improve overall agri yields. Besides diversifying the income source of farmers, it will help the economy at large through the additional revenue generated.”

Maulik Patel, Chairman & Managing Director, Epigral Ltd. 

“The first Union Budget of Modi 3.0 is crucial as India Inc. eagerly looks forward to more reform measures and focus on developing key sectors that will further boost India’s progress towards Viksit Bharat. As we aim to become the 3rd largest economy, the importance of the chemical sectors can't be ignored and as a leading player in the industry we propose the following:

Implementation of Production-Linked Incentive (PLI) scheme in chemical manufacturing: This will undoubtedly enhance capacity of Indian manufacturers, ensure self-reliance in critical input products and increase the cost competitiveness. The Indian chemical industry has started seeing green shoots of recovery after reeling for over 12 months. Schemes such as PLI will provide a much-needed boost to local manufacturing and help the sector get back on track at a fast pace. Local manufacturers ensure our competitiveness in the global markets and renewed government focus will be key for their growth.

Another Integrated PCPIR:  The chemical sector in India needs more Dahej-like PCPIR (Petroleum, Chemicals and Petrochemicals Investment Region) region that will help in attracting investments, generate more job opportunities and help in optimal utilization of the available resources such as land. Dahej PCPIR has been a great success story and we will need to replicate the same model for a burgeoning chemical sector.

India is currently the sixth largest producer of chemicals in the world with the sector contributing 7 per cent to the country's GDP. India to emerge as the global manufacturing hub of chemicals will require significant reform measures, the seeds of which need to be sown now.”

Vimal Kumar, Managing Director, Best Agrolife Ltd.

“As India prepares for the Union Budget 2024, it is imperative for the government to take decisive steps to support the agrochemical sector, given its vital role in ensuring food security and sustainable agriculture. Our heavy reliance on imports from China highlights the need for implementing Production-Linked Incentive (PLI) benefits to boost local production. Additionally, increasing import duties on domestically produced raw materials can further encourage this growth. Lowering GST rates from the current 18% to 5% will reduce costs for farmers, thereby improving their income and the overall farm economy. Providing incentives will encourage micro-entrepreneurs to promote modernization through initiatives such as 'Drone as a Service' and the use of advanced machinery. Furthermore, introducing robust measures to combat counterfeit and spurious materials will ensure the integrity and safety of agrochemicals in India.”

S. Sunil Kumar, Country President, Henkel India

“The manufacturing sector is a key driver to India’s economic growth, contributing to 16-18% of the country’s GDP. The Indian government has played a crucial role through a series of strategic initiatives and policies, such as Make in India and PLI scheme, aimed at enhancing its competitiveness and productivity. To accelerate it further, strategic focus areas suggestions that can be beneficial: making raw materials available at scale locally, competitive tax structures, development of industrial corridors, and investments in research and development. Continued emphasis on improving the ease of doing business, streamlining regulations, and ensuring a stable policy environment will be crucial for attracting long-term investments in the industry.

The adoption of Industry 4.0 in manufacturing and sustainable practices is also gaining momentum. Industry 4.0 technologies, such as IoT, AI, and blockchain, are anticipated to receive further support as they mature and add more value, improving operational and supply chain efficiencies. A regulatory and financial framework that incentivizes sustainable practices will significantly boost sustainability across the value chain. Now that we have established a strong growth foundation and good track record, a favourable budget will undoubtedly spur further growth momentum.”

Sanjiv Kanwar, Managing Director, Yara South Asia

“As we anticipate the Union Budget, our focus is on policies that will invigorate the agricultural sector, foster ease of doing business, and promote a more sustainable and resilient agricultural ecosystem. We expect initiatives that will enhance credit and insurance frameworks for farmers and introduce an agriculture accelerator fund to spur growth. Addressing India's growing population necessitates a strong emphasis on sustainable soil management practices, including regenerative agriculture, along with water-efficient technologies and streamlined crop nutrition regulations. Additionally, tax parity for fertilizers and micronutrients, coupled with direct benefit transfers, will empower farmers to improve both the quantity and quality of their produce while minimizing environmental impact. This, in turn, will strengthen India's position in the global market. We are committed to working with the government and industry stakeholders to streamline regulations and promote a robust agricultural economy that empowers farmers, ensures ease of doing business, and prioritizes long-term sustainability.”

Raju Kapoor, Director, Industry & Public Affairs, FMC India

"The agricultural sector which is the backbone of the Indian economy has been through a challenging year. With monsoon playing truant, agricultural growth has diminished from 4.7% last year to 1.4%, which further added to the rural distress. This budget presents a crucial opportunity to address these concerns and propel the sector towards a brighter future. The government must prioritize agriculture and rural India, focusing on making farmers more resilient while simultaneously mitigating food inflation that disproportionately affects society's underprivileged segments.

Firstly, the budget must acknowledge the stark reality of food inflation, aggravated by stock restrictions on essential commodities such as pulses, wheat, and rice. This disproportionately affects the most vulnerable sections of society, demanding immediate attention. Similarly, the import dependence on pulses and oilseeds, the government's commitment to providing free rations under the Annapurna Yojana, and climate change further necessitate a robust domestic production system supported by developing an innovation ecosystem.

The government should prioritize R&D investments aligned with national priorities, focusing on developing climate-resilient crop varieties, microbial products, and sustainable farming practices. To facilitate the widespread adoption of technology, the budget should also incentivize the private sector participation in building a robust agricultural innovation ecosystem. Tax incentives for R&D investments by the private sector can encourage the development and integration of cutting-edge technologies. Furthermore, GST on agricultural inputs, such as agrochemicals, should be brought under the GST Council's purview and potentially lowered to 12% maximum to ease the financial burden on farmers.

The Kisan Samridhi Yojana should be strengthened to empower farmers with greater financial support and its utilization at farmers’ hands should be linked to the use of advanced agricultural inputs. Kisan Samruddhi coupons that could be used to purchase agricultural inputs would enhance productivity. This will ensure timely access to essential resources and subsequent financial support to the farmers. We expect that the budget should have adequate resources for capacity-building initiatives, and should incentivize the investments by private companies to train farmer groups, particularly women, creating awareness and adoption of modern growing practices.  Easy access to adequate and affordable credit will further empower farmers to be able to adopt these technologies and enhance their livelihoods.

Extending the PLI scheme for production and export of latest innovation crop protection chemicals in India will provide long term dividend to India. Similarly, aligned to the theme of making India the Global Drone Hub, expanding the PLI scheme for building the agri-drone component manufacturing ecosystem will go a long way.      

In a nutshell, we envisage that this budget is focused on agriculture, which will further lay the foundation for a strong, sustainable, and prosperous future for Indian farmers and the nation."

Mihir V. Shah, Executive Director, Vipul Organics Ltd. 

“With the Government being sworn in for a straight third time, we expect a continuity of policy. We expect a renewed focus on infrastructure development, manufacturing and job-creation.

India aspires to be an export hub with the stated target of exports of Goods and Services worth $2 Trillion by 2030. This can be made possible by reducing the tariffs on imports of raw materials and ensuring that the right building blocks are in place, especially for the manufacturing sector. In addition, putting stringent anti-dumping measures will ensure that the domestic manufacturers have a level playing field.

We believe that the Budget will ensure that the Government’s commitment to the manufacturing sector as a whole and Chemicals sector in particular moves seamlessly.

Today Chemicals contribute around 7% to the GDP and India is the 6th largest producer of chemicals in the world. The Chemical sector is estimated to grow to $300 Bn by 2025 and $1 Tn by 2040.

We hope that the budget focuses on bringing PLI in the chemical & petrochemical sector so as to propel growth, for both existing and greenfield facilities. In addition, development of quality infrastructure and chemical hubs with centralized waste and effluent treatment systems will bring India at par with the other manufacturing hubs. This will ensure that the sector continues to be an important participant in the India growth story.”

Dilip Sawhney, Managing Director, Rockwell Automation India

“India is on its path to emerging as a global manufacturing hub, driven by favourable government policies, a fast-growing domestic market, expanding consumer demand, and rapidly transforming supply chain dynamics as India joins the global value chains.  To achieve this goal, India must harness new and emerging technologies to build resiliency, improve quality, maximize workforce potential, and drive sustainable growth.

The Union Budget 2024-25 must continue supporting successful policies and introduce new measures through fiscal initiatives related to production-linked incentive (PLI) schemes, export promotions, trade agreements, tax reforms, and infrastructure investments. Furthermore, higher public expenditure should be allocated for industrial research and development (R&D) in cleantech, alternate energy, electric mobility, and future-ready workforce upskilling through high-quality national training programs in artificial intelligence (AI), machine learning (ML), data science, robotics, and cybersecurity.

Under the SAMARTH Udyog Bharat 4.0 initiative, the focus should be on improving the competitiveness of the Indian manufacturing sector, especially the MSMEs, by providing incentives for implementing smart manufacturing technologies across the ecosystem.”

Neeraj Garg, Co-Founder & Director, Horizon Performance Polyurethane, RYMBAL

"Rymbal, a chemical manufacturing company specializing in Polyurethane Systems, faces challenges like its peers due to the Indian chemical industry’s reliance on imported raw materials from countries like China, Japan, and Korea. To enhance competitiveness of Indian finished goods with imported finished goods, we suggest three key areas for government intervention. First, re-evaluating import duties is crucial; currently, the duties on raw materials are the same as on finished products, which makes domestic finished good manufacturing less competitive compared to cheaper imported finished items. Adjusting these taxes (taxing imported finished goods more than imported raw materials) could make Indian-made products more price-competitive. Second, the government should support research and development in the chemical sector by providing targeted funding, grants, and tax incentives. Establishing innovation hubs and fostering collaboration between industry, academia, and government will drive the development of new products and technologies, boosting global competitiveness. Finally, promoting sustainability through the adoption of eco-friendly chemicals and recycling initiatives can enhance India's global reputation and industry visibility. Implementing engaging policies will improve the competitiveness of the Indian chemical sector on the world stage, where sustainability is most valued demand from the chemical sector."

Rajiv Agarwal, MD & CEO, Essar Ports

“As India focuses on manufacturing and Make In India, reducing logistics costs and enhancing efficiency through continuous investment in modernization by both the government and the private sector is crucial. Government initiatives such as Gati Shakti, Harit Sagar, Sagarmala, and Maritime Amrit Kaal Vision 2047 are pivotal in facilitating this transformation.”