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Agrochemicals Industry in India: Positive Trends in Year to Comeqrcode

Dec. 3, 2021

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Dec. 3, 2021

Among various Agri-inputs, Agrochemicals contribute significantly to increase the agricultural productivity by protecting the crops from the ravages of pests and diseases.

Crop protection chemicals are inevitable as they are important to increase the farm yield and for the sustainability of agriculture. As agrochemicals help farmers to increase their farm productivity, these are the major contributory factor helping to feed the ever-growing population of our nation which is expected to grow up to 150 crores by 2030. Crop Losses in India is estimated to be a staggering figure over Rs. 140,000 crores as per statistics. Indian pesticide manufacturers are contributing significantly in reducing the crop damages by providing indigenous plant protection products at very reasonable price so that even small farmers can also afford to purchase them.

Although the Pandemic has affected us in all walk of life, the Indian agrochemical industries are considered to be one of the industries which has successfully fought the wrath of current pandemic. It has overcome the supply chain issues, changes in demand pattern and financial crisis in general.

Statistics reveal that agriculture contributes to about 20.19 % of India’s GDP. India is 4th largest producer of agrochemicals and also it is 13th largest exporter of pesticides in the global agrochemicals market. In the economic growth of India agrochemicals have contributed directly through the industrial growth as well as by their indirect role in improvements in agriculture productivity. In the recent 5-6 years 50% growth of agrochemicals manufacturing is due to increase in export demands. Both production and export of agrochemicals has substantially increased during the last decade and this trend is likely to continue.

Use of agrochemicals for crop protection is likely to increase in future due to the simple reason that its share in Agri-input cost is still minimum as compared to other Agri inputs and still only about 30% of agricultural area comes under umbrella of crop protection chemicals. Many of the products becoming generic and the indigenous industry having sound infrastructure and technological know-how to produce technical grade as well as specialized type of formulations add up to the agrochemicals basket available to the farmers for crop protection. Thus, the demand of agrochemicals would be ever increasing in view of increasing population and food demand; decreasing size of agriculture land due to urbanization; demand of quality agricultural product; regional economic growth etc. The value of Indian Agrochemical Market size in the year 2020 has reached nearly over Rs. 42,000 Crores i.e. approx. 6 Billion USD (Domestic Consumption ~20,000 and Exports ~22,000 crores) and it is expected to grow at a CAGR of around 8% till 2025.

Favorable agronomical conditions like sufficient moisture in the soil and adequate water level in reservoirs due to normal monsoon is likely to accelerate the agricultural activities. This will certainly increase the demand for agrochemicals in the country. Government support to the farmers/agriculture sector through various packages under the “Aatmanirbhar Bharat” is likely to further boost the agriculture. Government policies to strengthen financial condition of farmers for example increasing the credits for farmers up to 16.5 lakh crores, increasing MSP and other measures such as e-NAM portal and direct benefit transfer through PM Samman Kisan Nidhi are going to encourage the farmers. It is expected that bumper crop this year will make the farmers capable to spend more money on crop protection.

Recently there is an increased focus on modernising farming related services by major agrochemical companies. This includes application of agrochemicals and selling of agrochemicals by using e-commerce platform.  Farmers are very much excited to adopt innovative ideas and solutions such as product as a service and app-based market information, important advisory and online shopping of agricultural inputs including agrochemicals. These developments are likely to boost ease in availability of agrochemicals, thereby accelerating the growth of industry.

In recent years India has got unique advantage of being capable of developing capabilities of low-cost manufacturing due to economical labour and tax benefits. India has adequate technically trained personal and huge unutilized installed production capabilities. It may help to fulfil the local as well as global demand of agrochemicals. As the demand for agrochemicals in India is seasonal it can cater the global demands in the off-season periods and these factors are likely to make India a global manufacturing hub.

All these factors taken together the future of Indian agrochemicals is bright, however, as a note of caution, the regulatory ban of certain generic pesticides and the policy of continuing registration of Formulation Import without registration of its technicals are likely to impact adversely the Indian Agrochemical Industries. The latter has affected the Indian industry so badly in the past that a number of Indian manufacturing companies could not survive due to unethical practices of some MNCs which were in hands in gloves with Indian companies with their vested interest. This condition still persists and threaten to indigenous industry and against the “Aatmanirbhar Bharat” (self-reliance).  Indian industry is quite optimistic and hope that a pragmatic approach towards revamping the regulatory frame-work by the government will certainly help the industry to overcome the problem.

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Source: AgroNews

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