Global Footprint: India 2nd Largest Exporter of Agrochemicals

Agrochemical Exports Reach New Heights

No wonder, India’s agrochemical exports reached a new high of US$ 5.5 billion for the financial year 2022-23 from US$ 4.9 billion in 2021-22. The growth has been a whopping 108% from 2017- 18 when India exported US$ 2.6 billion worth of agrochemicals. With the government focusing all agrochemical projects, we expect to achieve US$ 10 billion in the next 3 years (Table 1).

Table 1: India’s Agrochemical Export

″According to the latest data released by the WTO, India has emerged as the second largest exporter of agrochemicals in the world. The rank was sixth, 10 years ago. This is indeed a remarkable achievement towards the direction of Make in India and AatmaNirbhar Bharat″, stated Harish Mehta, Senior advisor, Crop Care Federation of India (CCFI).

The USA is the largest buyer of Indian made agrochemicals followed by Brazil and Japan. This is a testimony to the high quality of Indian made agrochemicals which are used in over 150 countries worldwide.

Globally the agrochemicals market is estimated to be US$78 billion, almost 75% of this is of post-patent products. India is fast emerging as a preferred global hub for sourcing the post-patent agrochemicals. With favorable policy facilitation, the Indian agrochemical industry is confident of doubling exports in the next three years.

India has made a mark on the global agrochemical market by storm. India is the fourth largest producer of agrochemicals in the world. With exports expected to grow exponentially through 2030 the government has indentified this sector to achieve global pole position.

Surging Imports A Cause Of Concern

In order to boost domestic production and to curtail imports, Crop Care Federation of India (CCFI) has sought removal of hurdles and unethical practices. With advance in technology by Indian Companies India can reduce import and increase export by judicious use of agrochemicals in the domestic market.

With favorable policy frame work, the Indian agrochemical industry is confident of reducing imports.

Table 2: Exports and imports of agrochemical in India

Indian Companies investments are in establishing larger and new production facilities to cater to the domestic and global markets. Backward integration, capacity expansion and new registrations would foster the growth of Indian agrochemical industry.

Focus As Manufacturing Hub 

This global attention paid dividends for Indian agrochemical manufacturers, as much as 45% of the growth witnessed by agrochemical industries in India, was driven by exports. Judicious use of agrochemicals in the domestic market, boosted exports. India uses only 400gm/ hectare of agrochemicals as compared to the global average of 2.6 Kg/ hectare. The government’s ‘Make in India’ policy towards ″Aatmanirbhar Bharat″ facilitated in this effort.

Going back, Indian companies started with Elemental Phosphorus, Chlorine plant for captive consumption. India manufactured of Phosphorus Trichloride and Trimethyl Phosphide of 99.5% purity, whereas European plant was making lower than 98% pure. Europe was forced to stop manufacturing of these compounds.

There are some MNCs who are keeping monopoly by influencing the policy makers. This made Indian industry concentrate on process innovation, make superior quality pesticides at affordable price. There are many examples when Indian companies started manufacturing, they broke the monopoly by making higher purity pesticides at competitive price. When Indian companies introduced Organo Phosphorus pesticides, in Europe there was monopoly of European companies, Indian companies started making DDVP, Monocrotophos, Phosphimedon etc to fight the European manufacturers.

Logistic Advantage for Fast Track Exports

Major manufacturing plants located in coastal states like Gujarat, Maharashtra, Tamil Nadu etc. gives distinct advantage in logistics. The pandemic years followed and shipping from ports in China was affected. The ocean freight became prohibitive. The world market started to look for alternatives and India rose to the occasion. Even today, volatility in India is far less than in China. There is an urgent need to reform the customs clearance framework and become more liberal to fast tract exports. The pattern of governance, geopolitical fragmentation has had significant positive impact on the complexity of supply chains.

″One of the main objectives of Indian players is to make the country self reliant and independent of any foreign assistance. To achieve this objective, it is necessary to promote exports for which agrochemical industry is a noticeable example. With focus on agrochemicals the main aim is to earn a share in the global trade. With increased import bills, and increased global competition in the domestic market, earning foreign exchange is the need of hour for this Champion sector. R D Shroff, Chairman Emeritus, CCFI

Leaders in Innovation to Reduce Manufacturing Cost

Indian manufacturers have innumerable examples of innovation. When Synthetic Pyrethroid Cypermethrin was imported in India it was $104 per kg, and purity 92%. Today by innovation in process Indian industry is able to manufacture 97% pure and able to export it $10-12 per kg. European plants have closed down.

Some products like Isoproturon was monopoly of German company, using highly toxic raw material M/s. Gharda Chemicals of India invented new process using Green Chemistry (Safe products) and even German company had to copy the Indian process. (Table 3)

Table 3: Price of Imported pesticides when first introduced vs when registration were issued to local companies

There are many products like Bifenthrin, the quality of FMC was 88% when Indian company UPL started manufacturing it was 98% pure and captured a big share of market.

Decumba was the monopoly of BASF, which was of 88% pure but Gharda Chemicals started making it 98% pure. It is now known to the world that Indian scientist and engineers are equal to the best in the world they can produce pesticide of superior quality at a most competitive prices, so future of export of pesticide from India is very bright. 

Also when we produce locally, sizeable export also takes place which is an additional benefit for the country. 

Assured International Quality

The world has also started to realize that laws in India are far more stringent than many other countries when it comes to manufacture of agrochemicals. Before pesticide is released in the market in India, it has to undergo several field & laboratory trials. The Insecticides act, 1968 was introduced to regulate the import, manufacture, sale, transportation and distribution of insecticides to prevent harm to human life, environment and animals alike. Pesticide Management Bill 2020 which is yet to be passed by the parliament would ensure stringent checks on quality parameters.

Most of imported agrochemicals are imported under ‘OTHERS’ category, making it impossible to know the composition and the constituents of the imported products. Currently there are total 1138 pesticides (318 Technical Grade and 820 Formulations), almost 90% are being imported under ‘OTHERS’ category for agrochemicals.

Mandatory regulation from 1st October 2023, CAS number and IUPAC name with description and details of active ingredients, composition would deter importers to import undeclared agrochemicals or under wrong classification.

″We propose sampling of all imports under chapter 38 mandatory and maintaining 10% delta in custom duty of technicals and formulations from existing 10% on both. The proposal to assign 8 digit HSN code would ensure monitoring of all products & their quality.″ emphasised Mr. Harish Mehta.

Heavy Investment on R&D and Securing Global Patents

A lot of investment has been made on Research and Development (R&D) by Indian Corporates to innovate newer products and for sustainable quality.

Some of the leading Indian pesticides manufacturers spend more on research and innovation. In India we have strong talent of scientists and engineers, even forcing foreign funded environmental activists to constantly innovate to keep pace with Indian manufactures.  

There are number of good companies in India, who have very strong R&D departments, they are able to get patents for their process and formulations. Their patented products in developing countries like Europe and USA, giving Indian producers a big international market.

Talent pools of scientists are constantly working towards development. In India private companies have large number off-patent generic pesticides. With brilliant scientists and engineers, they are ready with more products in future. Today almost 75% pesticides sold in world market are off patented. With strong technical support, India is expecting much higher exports in the future.

Training on Optimal Use

Proper guidelines are issued and farmers need to follow instruction strictly. Agrochemicals are required mainly for crops like paddy, cotton, sugarcane, wheat, tea, fruits and vegetables. We educate farmers and their contract labour on the dosage, spraying techniques and use of only recommended pesticides as per Package of Practices resulting in optimum quantity as is evident from table 4. 

Table 4: Pesticide consumption in different countries

In contrast European Union is using 350000 metric tons of pesticides and producing less than half worth $178 billion of agricultural commodities.

We also distributed free PPE safety Kits sponsored by our members. We have the largest data base of farmers collated over the years. These ensure optimal use on crops meant for export without any registration and securing global patents. The chances of rejection of any food consignment are also minimized. 

NGOs Tarnishing Our Image

Indian pesticides industry is progressing very fast, inspite of environmental activists creating problems. Today Indian agriculture as a whole is going through false propaganda by foreign funded NGOs. Today Indian farmers are able to have high production with minimum use of pesticides. Indian agrochemical manufactures are organizing famers training programs. There are demonstrations in farmers field and we have proved that farmers in India may not be well qualified but they are intelligent and hardworking. By using merely 61702 MT of pesticides India is 2nd largest producer of agriculture commodities in the world valued at US $563 Bn.

False Narrative by Importing Lobby

Due to false propaganda about indiscriminate use of pesticides, poor quality produced, high residues of pesticides in food, commodities, and other negative propaganda by vested interests, Indian agrochemical industry have to fight hard. Because of this misinformation, the bureaucrats, politician and others are misguided by the importing lobby (who have hardly any manufacturing facility) influencing the Registration Committee, Ministry of Agriculture. Indian pesticides manufacturers, who are able to make quality pesticides at competitive price face problems when they want to manufacture pesticides in India. On false justification of giving data protection even after expiry of the patent Indian industry have to face hardships.

There is an import lobby, who are indulging in spreading lies and rumors like more than 50% of pesticides manufactured and marketed in India, are fake and spurious. Industry has been taking legal action against these NGOs and countered with authentic RTI responses which prove otherwise, backed by media support.

Table 5 indicates that import of readymade formulations (>55%) without Registering Technical is damaging the indigenous manufacturers and affecting exports.

Table 5: India’s Agrochemicals Import. Alarming share of Formulations

As a champion sector the Indian industry has already submitted a proposal to include agrochemicals under Production Linked Incentive (PLI) scheme, a favorable decision is awaited as huge future investment to the tune of ₹12000cr are linked with this scheme.

This article was initially published in AgroPages' '2023 India Focus' magazine.

If you would like to share your company's story. Please contact Christina Xie at christina@agropages.com