CCFI seeks revision in customs duty to 30% on formulation imports in India

The Crop Care Federation of India (CCF) has sought intervention of Union Minister for Agriculture & Farmer Welfare Narendra Singh Tomar to control the import of agrochemicals to India. In a letter to Tomar, the Federation stated that the import of agrochemicals has increased from Rs 9,096 crores to Rs 12,418 crore, reflecting a growth of 37% in 2019-2020 and 2020-21. During the same period, the exports increased from Rs 23,757 crore to Rs 26, 513 crores, reflecting a growth of 12%.

“Imports are growing much faster than exports, draining out valuable foreign exchange. Surge in imports for non-essential agrochemicals mainly by traders for resale and by MNCs ( Rs 6500cr ) as readymade formulations is increasing over the years with and needs to be stopped,” Harish Mehta, Senior Advisor, CCFI, wrote in the letter to the Minister.

Hence, the CCFI sought the Minister’s intervention to recommend:

CROP CARE FEDERATION OF INDIA

NEW DELHI 

16th May, 2021



Shri Narendra Singh Tomar 

Honourable Minister for Agriculture & Farmer Welfare 

Krishi Bhavan

New Delhi 

Dear Sir, 

SURGE IN IMPORTS OF AGROCHEMICALS :URGENT NEED TO INCREASE CUSTOMS DUTY TO 30% ON FORMULATION IMPORTED AGROCHEMICALS 

As you may be aware, CCFI(Crop Care Federation of India) is an apex association of over 50 Indian agrochemical corporates involved in manufacturing and marketing of Agrochemicals in India. We have the capability and capacity to not only meet domestic demand but our members are also responsible for over 95% of Indian agrochemical exports to 130 countries meeting stringent quality specifications.

We are pleased to apprise you of the export- import data just published by Ministry of Commerce for FY 2020-21. 

AGROCHEMICALS TRADE (INR)

EXPORTS:

Exports increased from Rs 23,757 Cr to Rs 26, 513 Cr between 2019-20 and 2020-21 [Growth Rate: *12%]

IMPORTS: 

Imports shot up from Rs 9,096 Cr to Rs 12,418 Cr [Growth Rate 37%] meaning thereby that Imports grew 3 times faster !

The figure on imports of Rs 12418 Cr covers only import of PESTICIDES(Technicals and Formulations) under HS code 3808 and excludes imports of N-1(intermediates) and the like.

Imports are growing much faster than exports, draining out valuable foreign exchange . Surge in imports for non- essential agrochemicals mainly by traders for resale and by MNCs. (Rs 6500 Cr) as ready made formulations is increasing over the years with and needs to be stopped at the earliest.

We seek your kind intervention to recommend the following measures:

1. An increase in customs duty @30% on Formulation imports as vested interests tend to downplay the adverse effects" of rising imports leading to rising trade deficits.

2. We are confident that Agriculture Ministry would take up this issue to allow us to follow the policy of “Atmanirbhar Bharat” & “Make in India” initiative to which our members are committed. This generates not only employment but promotes local MSMEs.

3. Indian corporates have adequate capacity in manufacturing liquids, granules, WP and grain storage chemicals to the extent of 30-35%, (current capacity) which can be ramped up exponentially. 

4. Indian manufacturers have technical capability to indigenously manufacture both existing pesticides and newer advanced agrochemical molecules required by domestic industry and exports. However , unnecessary hurdles must be removed so that they can operate freely.

5. In order to reverse the trend of import of pesticides, particularly ready-made formulations and over independence the on China, which is the main source of substandard pesticides, it is imperative that the Registration Committee(RC) is advised to undertake suitable modifications in its regulations and guidelines for the registration of pesticides for indigenous manufacture and facilitating availability of pesticides at affordable prices.

6. Needless to mention the margin on imported proprietary Formulations is as high as 200%, fleecing the farming community over the years, hampering their effort of doubling their income. This should be stopped.

7. We have already submitted in December 2020 our proposal to the Ministries of Agriculture and Farmers Welfare; Chemicals and Fertilizers and Commerce & Industry Ministry to include Agrochemicals under Production Linked Incentive(PLI) scheme with complete list of intermediates, Technicals & formulations that can be made in India for your active consideration. 

We sincerely hope you as Union Minister of our Nodal ministry, would kindly take necessary steps to promote indigenous manufacturers, to MAKE IN INDIA a reality. 

Thanking you and looking forward to your kind cooperation !

Regards

HarishMehta 

Senior Advisor 

(CCFI) Crop Care Federation of India