Trade Trends News
July 25, 2023 , New Delhi: India is set to become the world's second-largest exporter of agrochemicals in 2022 at $5.5 billion, overtaking the United States at $5.4 billion, according to the latest data released by the World Trade Organization. China leads in agrochemical exports with $11.1 billion.
India's agrochemical sector has earned a trade surplus worth Rs. 289.08 billion ($3.5 billion) in FY 2022-23. The performance on the export front is attributed to the technological capability of the Indian industry to quickly launch post-patent products at competitive prices in the domestic and global markets.
Indian Agrochemical Market
The global agrochemical market is estimated at $78 billion, of which nearly 75% is post-patent products. India is fast becoming the preferred global center for sourcing post-patent agrochemicals.
Chlorpyrifos (CTPR) is the world's largest selling insecticide with estimated sales of Rs. 1,300 crore annually. Until last year, India was importing this insecticide. Many Indian companies have now brought locally manufactured CTPR to the market. The industry expects to tap the global CTPR market with its low-cost manufacturing.
In order to increase domestic production and reduce imports, agrochemical industry body Crop Care Federation of India (CCFI) has suggested certain measures to the Indian government to discourage imports of ready-to-use pesticide formulations.
Commenting on India's ongoing Free Trade Agreement (FTA) discussions with the European Union, the UK and other countries, CCFI President Mr. Deepak Shah has warned against granting any Trade Related Intellectual Property Rights (TRIPS) and such measures. Granting data exclusivity to western multinationals as it will adversely affect the growth of India's agrochemical and pharmaceutical sectors.
Deepak Shah further said, "Indian companies have invested heavily in recent years in setting up new and larger manufacturing facilities to meet the demands of the domestic and global markets. Backward integration, capacity expansion and new registrations will contribute to the growth of the agrochemical industry in India. Driven by favorable policies, the Indian agrochemical industry is confident of doubling its exports to $10 billion in the next three years."
Investments in agrochemicals
To further improve investment in the sector, CCFI has made representations to the ministries of commerce and finance, emphasizing the need for tariff revisions.
Harish Mehta, Senior Advisor, CCFI, told Krishak Jagat: "The current 10% tariff on technologies and formulations is a disincentive for Indian manufacturers. The association has advised the ministry to revise the tariffs on imported formulations of crude drugs to 20% and 30% to maintain a minimum 10% differential between the two tariffs. This will not only reduce unnecessary imports from China, but will also incentivize Indian manufacturers to make new investments and increase capacity in liquid, granules and wettable powders to expand growing domestic consumption. It will also help double exports to $10 billion over the next three years."
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