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Indian agchem industry to reach $7.5 bn by FY19

Indian agrochemical industry is estimated at $4.25 billion in FY14 and is expected to grow at 12-13% per annum to reach $7.5 billion by FY19, says a report from Tata Strategic Management Group and FICCI presented at the Fourth National Conference on Agrochemicals 2014.

"Indian crop protection industry is estimated at $4.25 billion in FY14 of which 50% are exports. The crop protection industry has experienced strong growth in the past and is expected to grow further at 12-13% per annum to reach $7.5 billion by FY2018-19.

"The industry is dominated by insecticides which contribute to 60% of the overall demand, followed by fungicides and herbicides which account for 18% and 16% of the demand respectively," Tata Strategic Management Group said in its 'Agro Chemicals' report.

The report highlights the changing food consumption patterns in India, demand patterns and future growth potential of crop protection industry in India, besides highlighting the need of agrochemicals to overcome the challenges faced by domestic agriculture in ensuring food and nutritional security of the nation.

The report showcases the key imperatives for agrochemical companies, government and regulatory bodies to promote judicious use of genuine agrochemicals.

Announcing the findings of the 2014 report, Manish Panchal, Practice Head - Chemicals & Energy, Tata Strategic Management Group said, "Agrochemicals play a critical role in ensuring food and nutrition security of the nation.

"Lower per hectare yield at 3 tonne/ha in India as compared to global average of 4 tonne/ha highlights the need of agrochemicals for Indian agriculture. In order to realise true potential, industry, government and regulatory bodies need to work in tandem."

The report highlights that Indian agriculture sector is facing critical challenges like reduction in arable land, decreasing farm size, increasing pest attacks, low per hectare yield and a shift towards animal products consumption, all of which are leading to demand outpacing supply in the country's food chain.

Agrochemicals could play a significant role in overcoming this imbalance.

"Indian crop protection market is supported by strong growth drivers. Current consumption of crop protection products in India at 0.6 kg/ha, is much lower than the world average of 3 kg/ha," the report said, adding that this offers immense opportunities for future growth.

According to report, the sector is also driven by opportunities for contract manufacturing and research for Indian players by leveraging the large scientific pool available in the country.

Despite the strong growth drivers, Indian agrochemicals industry faces challenges in terms of low awareness among farmers and rising sales of non-genuine products, it said, adding a collaborative approach by the industry, government and regulatory bodies is the need of the hour to realise full potential of agrochemicals industry.