Herbicide export growing at CAGR of 23% for 4 years, how could Indian agrochemical industry maintain its strong growth?

With the economic downturn and the destocking pressure, the global chemical industry in 2023 suffered from a low demand for chemical products, which fell short of expectations.

The European chemical industry needed help with the cost and demand of dual pressure; the structural problem severely challenged its production. Since the beginning of 2022, chemical production in the 27 European Union (EU) member states has shown a continuous month-on-month downward trend. Although this downward trend eased somewhat in the second half of 2023, the road to recovery of the region’s chemical industry was fraught with difficulties. 

This included the low demand, the higher energy prices (natural gas price is still roughly 50% higher than in 2021), and the continued pressure of material cost. In addition, following the supply chain challenges incurred by the Red Sea incident on December 23 last year, the current geopolitical situation in the Middle East is in turmoil, which may hurt the recovery of the global chemical industry.

Indian chemical market growing rapidly

The Indian chemical market has been growing strongly. According to an analysis of Manufacturing Today, the Indian chemical market should grow at a CAGR of 2.71% in the next five years, with a total turnover of up to US$143.3 billion. At the same time, the number of companies is expected to increase to 15,730 in 2024.

The Indian chemical industry has shown strong macroeconomic indicators. The Indian government’s openness, coupled with the establishment of the automated approval mechanism, has further strengthened investor’s confidence and injected new impetus into the continued booming of the chemical industry. From 2000 to 2023, the Indian chemical industry attracted a total FDI of $21.7 billion, including strategic investments from multinational chemical giants such as BASF, Covestro, and Saudi Aramco.

Indian agrochemical industry expected to grow at a CAGR of 9% in 2025-2028

In recent years, the Indian government rated the agrochemical industry as one of India’s 12 most promising industries with global leadership, having actively promoted the initiative of Make in India to simplify the administration of the pesticide industry, strengthen infrastructure construction, and strive to facilitate India to be a global agrochemical production and export center.

According to the Indian Ministry of Commerce, India’s agrochemical export in 2022 was $5.5 billion, surpassing the United States ($5.4 billion) to become the world’s second-largest agrochemical exporter.

Moreover, the latest report from Rubix Data Sciences predicts that the Indian agrochemical industry is expected to show significant growth in the fiscal year 2025 – 2028 at a CAGR of 9%, which will drive the industry market value from the current $10.3 billion to $14.5 billion.

In the fiscal year 2019 - 2023, India’s agrochemical exports grew at a CAGR of 14% to have reached $5.4 billion in 2023. In recent years, India’s significant export destinations for agrochemicals have increased significantly, with the top five countries (Brazil, the United States, Vietnam, China, and Japan) accounting for nearly 65% of its total exports, which has increased significantly over the 48% in the fiscal year 2019. Herbicide is essential for the agrochemicals sector, which grew at a CAGR of 23% in the fiscal year 2019 - 2023, accounting for 41% of India’s total agrochemical exports from 31% in the past.

Exports by the Indian chemical companies will likely usher in growth, benefiting from the positive effect of inventory adjustment and the higher production output. If the recovery in Europe continues to be slow or unstable, exports by Indian chemical companies in 2025 will inevitably face challenges. The loss of the competitive advantage in the EU chemical industry and the boosted confidence of Indian companies may provide the Indian chemical industry with an opportunity to take up a better position in the global market. 

On July 18 and 19, 2024, the 2024 China Pesticide Exporting Workshop (CPEW) is scheduled to take place in Hangzhou, China, where  Rohit Nagraj, Senior Vice President of Centrum Broking Limited in India, and Samir Dave, Secretary General of PMFAI, are invited to attend. They will share their insights into the global chemical development trend, business chances in India, the changes in Indian agrochemical exportation, global chemicals and agrochemical supply, and industry trends.

Theme of presentation:

Comprehensive Analysis on the Chemical and Agrochemical Industry - From Global Markets to Indian Companies, Insights into the Status Quo, Prospects and Investment Opportunities

Speaker: 

Rohit Nagraj, Sr. VP, Centrum Broking Limited (India)

Theme of presentation:

The Changing Patterns and Trends ofIndian Agrochemical Product Exportsfrom a Data Perspective.

Speaker: 

Dr. Samir Dave, Secretary, PMFAI (India)

See Agenda