CCFI expresses concern to Finance Minister, Ms Nirmala Sitharaman over surge in Agrochemical Imports in India

The Crop Care Federation of India (CCFI), the premier 60 year old federation representing 50 major Indian agrochemical manufacturers, has submitted a detailed representation to Union Finance Minister Nirmala Sitharaman earlier this month calling for urgent upward revision of customs duties on agrochemical imports. 

Mr. Deepak shah

Chairman CCFI

CCFI Chairman Deepak Shah, stated ″The rising imports threaten indigenous manufacturers and are against the policy of government to promote Make in India. Agrochemical imports have surged by 53 percent in the last five years, increasing from ₹9,096 crore in 2019-20 to ₹13,998 crore in 2024-25. Despite significant domestic investments totalling over ₹40,000 crore, Indian manufacturers are unable to compete with cheaper imports, mainly from MNCs and trading lobby importing large quantiles for resale.″  

The Federation highlighted that almost half of India’s formulation manufacturing capacity remains unused, as imports of both ready made formulations and Technical have unrestricted access to the Indian market.

Agrochemicals a Trade surplus ″Champion sector″

Source: Ministry of Commerce Database, accessed on 19th May, 2025.

Indian companies, in line with the global trend hold 85 percent of generic pesticide market and have become the world’s second-largest exporter, surpassing the US. However, unchecked imports of finished formulations and raw materials are a disincentive for domestic manufacturing.

Imperative need to increase Custom duty

CCFI has recommended an immediate increase in custom duty from the present 10% to 30 percent on imported finished formulations and 20 percent on Technical grades. It also suggested a possible differential duty structure with at least a delta of 10%, with higher rates on formulation import. 

″Formulation import entails no value addition, generates no employment, no stringent quality checks and is more expensive to the farmer″ stated HarishMehta, senior advisor CCFI.

Mr Deepak Shah further elaborated ″Over the years CCFI members have focussed on the end user ie farmer. Pesticides account for less than one percent of total crop input costs. Therefore, increasing customs duties is unlikely to impact the farmers’ income India uses just 380g /Ha perhaps the lowest in the world″

CCFI raised alarms over the purity and safety of imported formulations, warning that some products may probably contain expired or substandard technical materials with unknown toxicity profile. This lack of quality control could have serious environmental and health consequences.

The Federation stressed that Indian companies with their own Research & Development, already possesses the technology and have the capability to manufacture these products domestically, at a substantially lower cost, making imports unnecessary.

Level playing field for global competitiveness

The Federation pointed out that exporting countries are incentivised ranging between 9 to 16 percent, which is an unfair advantage. CCFI urged the Indian government to introduce similar duty drawbacks or subsidies to create level playing field for domestic manufacturers. The Federation also urged for the creation of dedicated Harmonized System of Nomenclature (HSN) codes to properly classify agrochemical imports, enabling better monitoring and enforcement.

CCFI insisted that imported formulations should only be allowed after mandatory registration of their corresponding technical-grade pesticides in India, subject to the same stringent scrutiny as domestic products. The Federation noted that many imported formulations bypass these checks and advocated for restricting or stopping imports of finished formulations, thus encouraging local manufacturing and employment generation.

Domestic Industry supporting employment generation

The Federation highlighted the heavy outflow of foreign exchange due to imports of finished products, which could be saved if the products were manufactured locally. Increasing customs duties and limiting imports would not only conserve foreign reserves but make India as a manufacturing hub.

In his letter, Chairman Deepak Shah reaffirmed CCFI’s commitment on ″ Collaborating with the government is a major initiative to grow India’s agrochemical sector. I would urge the Finance Minister to take swift and decisive action by revising customs duty structure and strengthening import regulations to ensure the long-term sustainability of domestic manufacturers. Such measures, are essential to protect farmers, trade partners, promote self-reliance, and realize the vision of Atmanirbhar Bharat.″