India’s Promising Future in the Agrochemicals Market
1 August 2023 The agrochemicals industry in India is experiencing significant growth and is expected to continue expanding in the coming years, writes Nicole Wisniewski in a recent article in AgriBusiness Global DIRECT. The market size reached nearly $6 billion in 2022 and is projected to grow at a compound annual growth rate of 8.5% between 2023 and 2028, reaching a value of almost $9.82 billion by 2028. This growth is attributed to favorable domestic policies, a supportive investment environment, and increased production capacities and infrastructure development by Indian companies.
The Indian government’s “Make In India” initiative, which aims to promote domestic manufacturing, has played a crucial role in supporting the agrochemical industry. This initiative has reduced regulatory hurdles and facilitated the upgrade of necessary infrastructure, enabling India to become a global hub for the manufacture of agrochemical products. The government and industry have also invested heavily in research and innovation to develop new molecules, manufacturing processes, and green chemistry products.
One key driver of India’s growth in the agrochemical sector is the backward integration of production processes. Indian companies have been investing in the production of off-patent molecules and reducing their reliance on imports from China. They have also focused on registering off-patent products and developing relationships with distributors to push volumes at more affordable prices. Indian manufacturers are known for their impeccable quality and cost-effectiveness in producing organophosphorus, carbon disulphide, and pyrethroid chemistries.
However, there are challenges that need to be addressed. India currently lacks the availability of yellow phosphorous, which limits the production of certain intermediates. The country also lacks mega production facilities like those in China. Additionally, agrochemicals are excluded from the government’s production linked incentive (PLI) scheme, which provides incentives for goods manufactured in India. Including agrochemicals in the PLI scheme and regulating the import of agrochemical formulations could attract new investments and support the government’s “Make In India” efforts.
Despite these challenges, the future of India’s agrochemical industry looks promising. The changing agricultural landscape in the country presents new opportunities for manufacturers, formulators, and suppliers. According to a report, the industry’s revenues are estimated to grow 15-17% in 2023 and 10-12% in 2024, driven by strong exports and stable domestic demand. The sector’s growth will depend on factors such as raw material availability and favorable weather conditions.
Overall, India’s agrochemicals industry is on a positive growth trajectory, supported by government initiatives, increased production capacities, and innovation. The country has the potential to become a major player in the global agrochemical market, driven by its focus on domestic manufacturing and the development of high-quality, cost-effective products.
Read the full article in AgriBusiness Global DIRECT.
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