India: CCFI urges govt to include agrochemicals under PLI scheme

Date:09-24-2021

The Crop Care Federation of India (CCFI) has urged the Ministry of Chemicals & Fertilizers to include agrochemicals under the PLI scheme. In a submission to Bhagwanth Khuba, Minister of State for Chemicals & Fertilizers, Govt. of India, the Federation said: “Agrochemicals are part of your Ministry along with portfolios of Fertilizers and Petrochemicals but as you would appreciate agrochemical is a niche upcoming sector and cannot be equated with fertilizers and petrochemicals. We feel that this is the only sector where exports at Rs 30000 crores are higher than domestic consumption and therefore it should be given for right impetus, independent of petrochemicals.”

Appreciating the Govt’s initiative, Harish Mehta, Senior Advisor, CCFI said that India has the capacity and capability for successfully manufacturing many complex chemistries and produced large volumes of technical grade products over last many years.

Though India ranks 2nd in the World agricultural production, we are 4th largest manufacture of agrochemicals after USA, China and Japan. Food and nutrition which are the need of the growing population require a sustainable approach that puts thrust on increase in production against the background of lower yields and decreasing farm sizes.  

“With the emergence of the newer pest India remains one of the lowest in terms of per capita consumption of pesticides at 400gm /ha. with potential for significant growth,” Mehta added.

The use of crop protection chemicals can increase crop productivity by mitigating crop losses due to pest and diseases. Insecticides are the largest Sub- Segment of agrochemicals with 55% market share whereas herbicides constitute 21% as the fastest growing segment because of non-availability of skilled labour on all crops of economic importance like cotton, paddy, soyabean, sugarcane, vegetables and wheat, besides Cereal & Fiber crops, Oil seeds, Horticulture and plantations.

The Federation stated that agrochemicals are extremely vital for food security and also for helping farmers double their income. Agrochemical industry is now categorized as Champion Sector and should be considered for including under Production Linked Incentive (PLI) scheme for indigenous manufacturers.

Since there has been an surge in imports, CCFI members have suggested minimum 30% customs duty be imposed on the Formulation imports, on products currently manufactured in India which are out for patent period, Mehta informed. For products which are currently not manufactured in India this duty may be made applicable as soon as any company starts manufacturing in India, he added.

Minimum 30% customs duty may please be imposed on the imports of Technical Grades agrochemical products which are already being manufactured in India.

Minimum 20% customs duty may be imposed on import of other out of Patent Technical grade agrochemical products in order to encourage Indian manufacturers to launch new molecules.

Expressing apprehension, Mehta opined: “Imports of such products from China ends up in non- utilization of existing capacities of Indian industry which is estimated at 35% for liquids, granules & WP. Storage chemicals are another important category requiring support. It must be ensured that imports be allowed only for captive consumption by the importer and not for trading or merchant sale.”

 CCFI has also requested support for providing Investment allowance, lower interest cost and moratorium of two years for the companies who are investing more than Rs. 25 crores for manufacturing, in the agrochemical sector which would be import substitutes of Technical/ Formulation grade as well as Intermediates.

This is due to the fact that the cost of agrochemicals to the farmers is about 4% of the total value of the produce, whereas, it reduces crop losses between around 25 to 30% during crop cycle and storage.

The Federation urged that agrochemicals as a champion sector should be given priority for inclusion under PLI scheme to help Indian manufactures to emerge as global champions.  “Inclusion under PLI scheme would generate employment directly in factories besides field personnel in educating the farmers,” Mehta said.