Manufacturing pesticide for export, export norms to be relaxed in India

Date:10-23-2013

The norms for pesticides exports and manufacturing of  pesticides through foreign technology from India may be liberalized.
 
According to official sources, the liberalization is aimed at making India hub for manufacturing pesticides especially those through buying the technology from foreign companies. After manufacturing of those high end pesticides, these pesticides will be directly exported out of India.  These pesticides will not be marketed at all into the domestic India market.

Thus as per the proposal of liberalization, these products will not be put through stringent inspection norms as regards t to the quality and procedures. However factories engaged in such technology transfer from overseas and manufacturing in India will have to comply with the safety, environmental norms and labour standards.
 
A discussion has already taken place between the ministries of agriculture and chemicals and fertilizer with the ministry of commerce.
 
A similar endeavour has also been taken for export of imported processed foods. 

While the exporters of such product will import the processed food, they will only export it and not market it in the domestic market. Thus these products will not be subjected to stringent inspection of food standards in India.    
 
India is one of the largest producers of pesticides in Asia. In value terms the size of the Indian pesticide industry alone was $3.8 billion in the year 2011 that produces even those pesticides which are banned in the developed countries.
 
Key destination markets for Indian exports of agrochemicals are USA, U.K., France, Netherlands, Belgium, Spain, South Africa, Bangladesh, Malaysia and Singapore. India is one of the most dynamic generic pesticide manufacturers in the world with more than 60 technical grade pesticides being manufactured indigenously by 125 producers consisting of large and medium scale enterprises (including about 10 multinational companies) and more than 500 pesticide formulators spread over the country.
 
However, the industry seems to financially constrained, said official sources mainly due to rising costs of inputs, governmental duties and taxes, and the cost of capital. There are also high rates of excise duty both on intermediates and finished products, and excise and sales taxes account for nearly 20% of the cost of pesticides.
 
The pesticide industry is a part of the chemical industry. Reportedly, the global turnover of the chemical industry is more than three trillion US dollars.

The Indian Chemical Industry ranks 12 by volume in the world production of chemicals. With the current size of approximately $108 billion, the Indian chemical industry accounts for about 3% of the global chemical industry.

By 2017, according to the Planning Commission of India, it could reach the size of $224 billion or $290 billion (about 6% of global industry). Indian chemical industry accounts for approximately 7% of Indian GDP and the share of industry in national exports is around 11%.  In terms of volume, India is the third-largest producer of chemicals in Asia, after China and Japan.