Pesticides Manufacturers and Formulators Association of India (PMFAI) on last Friday urged the government to increase the import duty on technical and finished pesticides to 20-30 per cent to protect the domestic agro-chemicals industry.
Currently, 10 per cent customs duty is levied on import of technical grade and finished pesticide formulations.
Before 1991, a customs duty of 40 per cent was levied on intermediates and raw material and technical grade pesticides used for manufacturing of formulations. However, in 2007, import duties on technical grade pesticide and finished formulation were brought at par.
"There are a lot of anomalies in the current customs duty regime that favours the imports of pesticides rather than manufacturing in India. This gives an unfair advantage to MNCs and importers and defeats the vision of 'Atmanirbhar Bharat'," PMFAI President Pradip Dave said in a statement.
The government must amend the current structure of customs duty and increase them to 30 per cent and 20 per cent for imports of finished pesticide formulations and technical grade products, respectively, he said.
PMFAI represents over 200 small, medium, and large-scale Indian pesticide manufacturers, formulators, and traders.
Further, Dave said the low customs duty favours importing from overseas countries and especially from China that worked out as easier and cheaper.
"But it has caused a downward trend in the manufacturing sector in India with no new plants being set up recently."
Besides, investments in industries manufacturing key intermediates and raw material have dropped, leading to dependence on imports of manufacturing use products (MUPs) such as intermediates and raw materials, he said.
However, farm experts cautioned the government to exercise prudence on such kind of industry demands as the country is still dependent on imports for several pesticides such as Cartap Hydrochloride and Halosulfuron Methyl, which are not manufactured in India.
Cartap Hydrochloride is a major pesticide used for control of two major pests of paddy -- stem borer and leaf folder. The major source of this product is China. If customs duty is raised, this product will become costlier for India.
Similarly, Halosulfuron Methyl is used in India for control of Cyperus rotundus in Sugarcane crops. The only source of this product is Japan.
According to the PMFAI, Indian pesticide industry size at present is estimated to be at Rs 43,000 crore, including exports worth Rs 23,000 crore and domestic consumption of about Rs 20,000 crore.