The 18 per cent GST on agrochemicals makes quality crop protection expensive for farmers. Moreover, India’s reliance on imports highlights the need for PLI benefits to encourage local manufacturing
Union Finance Minister Nirmala Sitharaman will be presenting the Union Budget 2025 on February 1 in the Lok Sabha. Indian agrochemical sector expects Union Budget 2025-26 to prioritise investments in agricultural research and development (R&D), with a focus on developing new, climate-resilient crop varieties. The sector also seeks PLI scheme for agrochemicals.
Ravi Annavarapu, President, FMC India
“The Indian agriculture sector is undergoing major transformation on the back of technological innovations and the upcoming budget presents an integral opportunity to bolster the sector further and empower our farmers.
Increased access to affordable credit remains essential for our farmers. We urge the government to expand interest rate allocation programs and streamline loan processes. Strengthening the PM-Kisan scheme through increased payouts and broader coverage will provide essential income support. A more comprehensive and affordable crop insurance program is also critical to mitigate risks from unpredictable weather and market volatility.
Additionally, the budget must prioritise investments in agricultural research and development (R&D), with a focus on developing new, climate-resilient crop varieties. We also believe that the cost of farming must be reduced. To this end, we strongly recommend a drastic reduction in import duties and GST on pesticides, ensuring farmers have access to high-quality, innovative products. While increased customs duties on pesticides might be beneficial for many, we believe this would be detrimental to farmers. We recommend the budget to focus on two key areas i.e. making innovative technologies accessible and reducing the cost burden on farmers. This requires minimising levies on farm inputs. Specifically, we propose reducing customs duties on intermediates required for manufacturing pesticides from 7.5% to 2.5% and reducing customs duties on pesticides from 10% to 5%.
Furthermore, driving innovation in crop improvement, pest management, and sustainable farming practices is essential. Supporting and expanding Production Linked Incentive (PLI) schemes for the agrochemical and fertiliser sectors will encourage domestic production and reduce reliance on imports. We need to prioritize policies that encourage the adoption of new technologies, including precision agriculture and biotechnology which will help our farmers in the longer run. Sustainable agriculture practices and climate-resilient crops are paramount for the long-term benefit of our agricultural sector.
The 2025-26 budget can be a transformative one for Indian agriculture. In essence, it can lay the foundation for a more resilient, productive, and sustainable agricultural sector by being more inclusive, which will ultimately benefit both farmers and the nation’s economy holistically."
Vimal Kumar Alawadhi, MD, Best Agrolife
India is on its way to becoming a global leader in agriculture, with the Ministry of Agriculture projecting a record-breaking Kharif food grain production of 1647.05 LMT for 2024-25—a remarkable increase from the previous year. This achievement owes much to the unwavering support of the Indian agrochemical industry.
However, the challenges persist and to sustain this momentum and bolster India’s leadership in the agriculture and agrochemical sector we need robust government policies. The 18% GST on agrochemicals makes quality crop protection expensive for farmers. Reducing it to 5% would make these products more accessible, boosting productivity and profitability. Additionally, India’s reliance on imports highlights the need for Production-Linked Incentive (PLI) benefits to encourage local manufacturing.
The increasing pest resistance demands innovative solutions but at the same time the rising raw material costs are a major challenge for industry. To support this, the government could reintroduce the 200% income tax deduction on investments in R&D and registration studies. The PLI scheme and research linked incentives would create an ecosystem that drives innovation and develops solutions tailored to India’s agricultural needs.
The government can promote public-private partnerships to develop new crop protection molecules in India. These partnerships can help share the high discovery costs and boost domestic innovation. With institutional support, they can create a strong R&D ecosystem, reduce import dependence, and make India a leader in the global agrochemical market.
Sanjiv Kanwar, Managing Director, Yara South Asia
“As we anticipate the forthcoming budget, it is important to acknowledge the progress made in the agriculture sector over the past year. The government's recent initiatives to enhance farmer welfare, including improved credit and insurance schemes, have been commendable steps in the right direction.
Looking ahead, we see significant opportunities to further strengthen the sustainability of Indian agriculture. Key areas include increased investment in yield improvement programs, support for seed ecosystem, and accelerated adoption of digital agriculture.
Empowering Farmer Producer Organizations (FPOs) and implementing a balanced approach to fertilizer subsidy reform will also be crucial. Additionally, policy support for sustainable fertilizer use and faster introduction of new innovative products/ molecules will align well with the industry's focus on environmental stewardship.
We are confident that a forward-thinking budget will empower our farmers and pave the way for a resilient and prosperous agricultural future.”
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