Urgent need to bring agrochemicals under PLI scheme: CCFI

Urgent need to bring agrochemicals under PLI scheme: CCFI

Fresh investment of Rs. 12 000 crore expected by Indian companies in the next 3-5 years if PLI scheme is immediately approved

  • By ICN Bureau | March 07, 2024

India has the capacity and capability for successfully manufacturing many complex chemistries and produced large volumes of Technical grade products over last many years.

Harish Mehta, Senior Advisor, Crop care federation of India (CCFI), said “Agrochemicals are part of Agriculture Ministry along with portfolios of Fertilizers and Petrochemicals but as you would appreciate agrochemical is a niche upcoming sector and cannot be equated with fertilizers and petrochemicals. We feel that this is the only sector where exports at Rs 44, 000 crore are higher than domestic consumption and therefore it should be given for right impetus, independent of petrochemicals.” Today, India is the highest exporter of agrochemicals, he said.

Though India ranks 2nd in the World agricultural production, the country is the 4th largest manufacture of agrochemicals after USA, China and Japan.

With the emergence of the newer pest, India remains one of the lowest in terms of per capita consumption of pesticides at 380g/ Ha with potential for significant growth.

The use of crop protection chemicals can increase crop productivity by mitigating crop losses due to pest and diseases. Insecticides are the largest Sub- Segment of agrochemicals with 55% market share whereas herbicides constitute 21% as the fastest growing segment because of non-availability of skilled labour on all crops of economic importance like cotton, paddy, soyabean, sugarcane, vegetables and wheat, besides Cereal & Fiber crops, Oil seeds, Horticulture and plantations.

In the dossier submitted to GOI, it was stated that agrochemicals are extremely vital for food security and also for helping farmers double their income. Agrochemical industry is now categorized as Champion Sector and should be considered for including under PLI scheme for indigenous manufacturers on priority.

Since there has been a surge in imports, , CCFI suggested minimum 30% customs duty be imposed on the formulation imports, on products currently manufactured in India which are out for patent period. For products which are currently not manufactured in India this duty may be made applicable as soon as any company starts manufacturing in India. He suggests minimum 30% customs duty may please be imposed on the imports of Technical Grades agrochemical products which are already being manufactured in India. Also, minimum 20% customs duty may be imposed on import of other out of Patent Technical grade agrochemical products in order to encourage Indian manufacturers to launch new molecules.

Expressing apprehension, Mehta said “Imports of such products from China ends up in non- utilization of existing capacities of Indian industry which is estimated at 45% for liquids, granules & Wettable powders. Storage chemicals are another category requiring support. It must be ensured that imports be allowed only for captive consumption by the importer and not for trading or Merchant Sale.”

Support is also requested for providing Investment allowance, lower interest cost and moratorium of twoyears for the companies who are investing more than Rs. 25 crore for manufacturing, in the agrochemical sector which would be import substitutes of Technical/ Formulation grade as well as Intermediates.

It may please be noted, that the cost of agrochemicals to the farmers is about 4% of the total value of the produce, whereas, it reduces crop losses between around 25 to 30% during crop cycle and storage.

In conclusion, agrochemicals as a Champion Sector should be given priority for inclusion under PLI scheme to help Indian manufactures to emerge as global champions.  Inclusion under PLI scheme would   generate employment directly in factories besides field personnel in educating the farmers.

Fresh investment of Rs. 12 000 crore expected by Indian companies in the next 3-5 years if this scheme is immediately approved.

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