India and nations all over the world are going through the most difficult times due to disruptions in manufacturing and supplies of all commodities caused due to COVID-19 pandemic. As a key Agri Input sector, Pesticide Industry in India is no exception. The Pesticide Industry in India is going through one of the most difficult times, particularly MSMEs.
But every crisis throws many challenges and the future success depends on how well and how fast we get prepared to overcome the challenges. The challenges also brings with it some unseen opportunities for future, and in the case of Indian Agrochemical industry, we foresee many positives provided Government extends support. It is time for Government to initiate measures for taking all possible steps to support the Revival of Industries post-COVID 19 pandemic and bringing back the economy of nation on the road of growth.
Presently, India is 4th largest producer of Agrochemicals/Pesticides after US, Japan and China with total production of pesticides over Rs.38, 000 crores (US$ 5020 million) out of which pesticides over Rs.18,000 crores (US$ 2320 million) exported to global markets. Thus India is net exporter of Agrochemicals/Pesticides.
As the country is aiming to be self-reliant and achieve vision of “Make in India”, Pesticides Manufacturers & Formulators Association of India (PMFAI) has appealed to Government of India, for various measures to support Indian Pesticide Industry. Important of them are given below:
1. Financial and Procedural Support to Companies for Indigenous Production of Technical Grade Pesticides and Intermediates Required for Technical Production
PMFAI appeal to Government that considering the global scenario and disruptions in supply chains, it is high time for India to aim to achieve maximum possible local production of Technical Grade Pesticides and Intermediates required for production of Technicals. For this to happen, Government need to extend financial and procedural support to Indian companies to kick start local production of Intermediates and Technical Grade Products.
To stop dependency on imports, Indian companies have to set up manufacturing plants for local manufacturing of Technical Grade Pesticides and Intermediates which are required for production of Technical products. This will help Indian companies to enter into Global Pesticides market in bigger way. This will not only help to check surging imports and save huge amounts lost in foreign exchange, but will also help increasing local production of MSMEs on domestic availability of Technical and increasing exports. Moreover, India will also be able to take advantage of political differences between major global nations with China.
Recently the Department of Pharmaceuticals has declared an incentive scheme for pharma sector of Rs.10,000 crores for strengthening of domestic Active Pharmaceutical Ingredient (API) and Intermediates production units to boost manufacturing in India. According to scheme, Government is to provide financial incentive to those Pharma companies ready to invest Rs.500 crores in an existing or new plant. Broader vision is to make India self-sufficient in pharma sector.
PMFAI requested for similar way of support for domestic production of Technical Grade Pesticides (Active Ingredients) and Intermediates (required for production of Technicals), which will help Indian Pesticide Industry to move towards self-sufficient in the sector and minimize surging imports. PMFAI appealed that for Pesticide industry, Government should consider financial incentives to companies ready to invest in existing or new plants, at a range from Rs.50 crores to Rs.500 crores.
2. Measures to Support Revival of Indian Pesticide Industry
a) GST on Pesticides be reduced from the present high rate of 18% to minimum possible rate, to support the pesticide industry which goes through very hard times. On GST, Pesticide industry be kept in par with other Agri Inputs industry like Fertilizers, Seeds etc.
b) Export Rebates for Pesticides in India be increased from present 2% to 13% to support Indian Agrochemical companies in global markets. Otherwise Indian products will not be competitive in pricing.
c) To encourage Exports, Income from Exports of Agrochemicals be exempted from Income Tax, which was a practice followed till the year 2000.
3. Harmonization of Registration of Pesticides
Registration procedures needs to be harmonized especially for Exports. Registration of New Technical Grade Products must be encouraged in the country with fast track process with minimum data requirements.
Regarding registrations, first priority for CIB&RC should be to clear all pending 9(4) and 9(3) TIM registrations to encourage and support local manufacturing. TIM registrations be given priority. There are cases where Registration approved by RC, but Certificates of registration still not issued. CIB&RC should issue CR as early as possible.
Adopt policies for Compulsory Registration of Technical Grade Products in the country prior to granting registrations for Imports of Readymade Pesticides Formulations (Finished Products) which is a practice followed by major agricultural nations like US, Europe, Brazil, China, Australia, Argentina etc. India has also been following the policy till the year 2007. The policy guidelines introduced in 2007 allowing imports of readymade Pesticide Formulations without registering Technical Grade products in the country, has done considerable damage to the growth of Indian Pesticide Industry. The policy only helped to create monopolies of Importers, who stopped manufacturing of Technical Grade products in India. The policy has discouraged registration Technical Grade Products in India, resultantly no availability of Technical Grade products to MSMEs in India, who are mainly Formulators and major exporters. Farmers also looted by farmers as imported products sold to them at premium prices and at profit margin of 100% to 200%. There has been no new investments in the sector during last 10 years due to surging imports of finished products.
Attracting Investments in Agrochemical Sector in India including FDIs
PMFAI also appealed for relaxation in stringent environmental requirements. Unreasonable stringent environmental requirements put forward by Ministry of Environment, Forest & Climate Change (MoEF&CC), Central Pollution Control Board (CPCB) and National Green Tribunal (NGT) required to be removed to attract more investments in Agrochemical manufacturing sector. Presently, un-scientific pollution mitigation measures leading to industrial stress rather than encouraging investment in Chemical Sector.
Growth of Indian Agrochemical sector can contribute many ways to Indian economy like – (a) making available pesticides to farmer at most competent price; (b) it will increase job opportunities for Indian citizen; (c) increased revenue to Government by domestic sale and exports.
