Govt to bring PLI scheme to promote Indian domestic agro-chemicals manufacturing: Mandaviya

The government will bring a production-linked incentive (PLI) scheme for promotion of domestic manufacturing of agro-chemicals, Minister of State for Chemicals and Fertilisers Mansukh Mandaviya announced on Thursday. "Like we brought in the pharma sector, we will bring a production-linked incentive scheme for chemicals which are used in agro. Some basic chemicals are the same for all," he said addressing a webinar by organised by Ficci-HIL. 

The sector can progress adopting a multi-pronged approach, firstly by becoming globally competitive, and with reforms in rules and regulations as well as with the 'Make in India' approach, the country can further progress in the coming days, he said. The minister also assured that the Modi government will not bring such laws that will impact the industry and the country's growth. He also promised to meet the industry players to address their concerns.

"We need to meet face-to-face and discuss and sort out the issues. ... We are aware of the challenges faced by the industry...," he added. The minister further said the government wants the industry to progress as it realises the importance of the industry for the country's economy and generating jobs. "Our government is pro-poor, pro-farmers but industry friendly. ...We don't tax the poor and farmers. Industry is important as it only generates employment but also revenue to the government through payment of taxes," he added. 

Speaking on the occasion, Chemicals and Petrochemicals Secretary R K Chaturvedi said the government sees agro-chemicals as a sunrise sector, which can play an important role in Indian agriculture. He also shared that the government has set up a 2034 vision for the chemicals and petrochemicals sector to seize the opportunities to strengthen domestic manufacturing, reduce imports and attract investment for manufacturing key chemicals in the country.

The government has taken initiative to promote and facilitate 'Aatmanirbhar Bharat' (self-reliance India) in the chemicals and petrochemicals sector. Seeking reforms in the industry, Vikram Shroff, director at agrochemicals multinational UPL Ltd, suggested the government to introduce a production-linked incentive scheme for the agro-chemicals sector with incentives of 10-20 per cent output and creating an end-to-end manufacturing ecosystem through cluster development.

"The government is doing a great job for mobiles, pharmaceuticals and others. We welcome this (production-linked incentive scheme) for the agro-chemical industry. We feel that we will be able to do a great job," he said. Among other key recommendations, Shroff suggested the government to enhance tariffs on select final formulations for a specific period of time to ensure that domestic manufacturing industry is protected from potential price disruptions by importers during the early stage of product development.

He suggested the government to reduce the regulatory cycle for various approvals, ensure environmental norms are more in line with global ones and delink registration of molecules for exports from registration for domestic market. Besides, the government should create an innovation fund and a centre of excellence with a  focus on research and development, he added. Whereas Dhanuka Agritech Chairman R G Agarwal on behalf of the industry urged the government to relook at the Pesticides Management 2020 Bill, saying it does not meet the farmers requirement.

"Most of the clauses are just redrafted from Insecticides Act 1968 and Rules 1971. Clause of 5 years of jail term and Rs 50 lakh penalty in the bill is against the government's own policy of 'Ease of Doing Business'...," he added. He also urged the government to withdraw the proposal of increasing import duty from 10 per cent to 20 per cent on formulation import. Lastly, Agarwal said the present registration system has given lakhs of registration certificates to 5,200 companies, but the genuine ones are only 200. He suggested the government cancel registration certificates and licences of all fake companies.