PLI Scheme for Agrochemicals would stop surge in imports & make India as a global Manufacturing Hub: CCFI

Date:01-20-2023

Crop Care Federation of India (CCFI) is the apex trade body of 50 large Indian manufactures dealing in agriculture inputs like agrochemicals, fertilizers, seeds, farm equipment, nutrition & public health with PAN India presence. We have major investment in Research & Development to cater to the requirements of Indian farming community.
 
CCFI has again made a representation to Secretary (Chemicals) earlier this week, emphasising the need to include agrochemicals, which is a major inputs in agriculture, under Production Linked Incentive (PLI) Scheme.  
 
By including agrochemicals under Production Linked Incentive (PLI) Scheme would mean a broad push by Indian Government to get more local agrochemical players in their manufacturing ecosystem, catering for domestic market as well as for exports.
In spite of headwinds both on revenue margin &  growth front, indigenous manufacturers have the technical capability and unutilised capacity for quality manufacturing of formulations in liquids, granules, wettable powders etc
 
By non inclusion under PLI Scheme the surge in imports is estimated to reach over ₹15000 Cr. in the current year. As per industry estimates almost 55% of the imports are readymade formulations imported by MNCs and merchandising traders not only beyond their captive consumption, but majorly for resale at exhorbitant margins to exploit the farmers with proprietary monopolistic products which needs to be stopped
 
″We are unable to quantify the correct purity profile in imported formulations resulting in the supply of substandard material, possibility of expired stock with a toxic profile. The industry expects an investment of Rs. 12,000 Cr. in next 3 years if the proposal is implemented as per Indian Industry recommendation. CCFI finds that the steps taken by the Government of India for PLI Scheme in various other sectors as progressive and a commendable step. However the parity at 10% custom duty on imports both on technicals and formulations import is a disincentive for any manufacturer and therefore the government is logically considering a delta by imposing minimum 20% custom duty on technical & 30% on import of readymade formulations ″ stated Mr. Harish Mehta, Senior Advisor CCFI.

CCFI already submitted a dossier which includes:

1. Agrochemical Intermediates – 35 in number with their market size, potential and future growth. This list is based  on real requirements of Indian active ingredients manufacturing industry. There is no change in the annexure resubmitted on 22nd July, 2022.
   

2. Agrochemicals imported in India as Technicals - 81 numbers bifurcated in insecticides, herbicides and fungicides mainly imported by MNC’s
   

3. Agrochemicals imported in India as Formulations - 89 Readymade Formulation being imported which can be manufactured in India
   

4. List of Technicals imported in India- 31, despite having indigenous manufacturing capacities. In this category 63 companies in insecticides, 78 companies for herbicides and 46 companies for fungicide have indigenous manufacturing capacity.
   

Industry experts are of the view that agrochemical has to be a new sector in focus besides the 14 sectors where PLI Scheme has been announced. This would encourage private investment and Government should look at building upon the success of the program.

There is an imperative need to add this sector for generating employment as Indian manufacturers have their own manufacturing units on PAN India basis.