Budget 2024 must focus on Make in India by incentivizing Indian agrochemical industry: CCFI

The Central Government has brought in a strong focus on the agriculture sector in the last 5 years. The budget allocation for the Ministry of Agriculture & Farmers Welfare saw constant growth year over year. The total budget allocated to the ministry in FY23 was Rs 1.25 lakh crore. With the increased allocation, the government was able to launch various schemes to further improve the income of farmers, improve mechanization availability for small farmers, and also increased the minimum support prices of key crops.

The agri-input sector has high expectations from the upcoming budget for FY24, especially the agrochemical sector. The industry body Crop Care Federation of India (CCFI) is an association of over 50 Indian agrochemical companies and expects the government to bring in reforms that will benefit the Indian agrochemical manufacturers and in turn the benefits can be transferred to the farmers in terms of cost-benefit.

Speaking on the expectations from the upcoming budget R.D. Shroff, Chairman Emeritus, CCFI said, ″The focus of the budget should be to ensure that agrochemicals earn a share in the global trade. With increased import bills, and increased global competition in the domestic market, earning foreign exchange is the need of the hour for this Champion sector. The ministries are to keep this in mind while finalizing the forthcoming budget″.

Deepak Shah, Chairman CCFI said, ″There is an imperative need to increase customs duty on import of agrochemicals both on technical & formulations from existing 10% which is a disincentive for Indian manufacturers and draining our valuable foreign exchange″.

CCFI has reiterated the long pending demand of the Indian agrochemical industry and strongly recommends enhancing custom duty on Technical to 20% and 30% on import of all formulations OR at least maintain a delta of 10% between the two to minimize import of formulations which has no value addition, and quality on several occasions is questionable.

Rajesh Aggarwal, Vice Chairman, CCFI said, ″Generic agrochemicals constitute 80% of the global market. The Indian manufacturers can increase their production to not only meet domestic demand but also exports which have now crossed ₹44,000Cr (USD 5.5 bn) second highest in the world. We expect another fresh investment of Rs 12,000 Cr in the next 3 years provided a favorable decision on the PLI scheme is taken on priority.

The industry body had made a detailed proposal to the government to include agrochemicals now a ″Champion sector″ under the Production Linked Incentive (PLI) scheme so that the manufacturers could be incentivized to enhance their production. The current average capacity utilization of manufacturers is at 55%.