PMFAI Appeals to Government for Measures to Support Indian Pesticide Industry During COVID-19
India and nations all over the world is going through 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, the pesticide industry in India is no exception. The pesticide industry in India is going through one of the most difficult times.
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 bring with it some unseen opportunities for future, and in the case of the 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 the fourth largest producer of agrochemicals/pesticides after U.S., 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 a net exporter of agrochemicals/pesticides.
As the country is aiming to be self-reliant and achieve the vision of “Make in India,” the Pesticides Manufacturers & Formulators Association of India (PMFAI) has appealed to the government of India for various measures to support the Indian pesticide industry. PMFAI President Pradip Dave provides four key highlights from that appeal below:
1. Financial and Procedural Support to Companies for Indigenous Production of Technical Grade Pesticides and Intermediates Required for Technical Production
With the PMFAI appeal to Government to consider 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, the government needs 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 the global pesticides market in a 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 micro, small, and medium enterprises (MSMEs) on domestic availability of technicals 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 declared an incentive scheme for the 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 the scheme, the 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 the Indian pesticide industry to move towards self-sufficient in the sector and minimize surging imports. PMFAI appealed that for the pesticide industry; the 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
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.
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.
To encourage exports, income from exports of agrochemicals be exempted from income tax, which was a practice followed until 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 Central Insecticide Board & Registration Committee (CIB&RC) should be to clear all pending 9(4) and 9(3) TIM registrations to encourage and support local manufacturing. TIM registrations should be given priority. There are cases where registration approved by RC, but certificates of registration still are 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 the U.S., Europe, Brazil, China, Australia, and Argentina. India has also been following the policy since 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 the 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, resulting in 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.
4. 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 the agrochemical manufacturing sector. Presently, unscientific pollution mitigation measures lead to industrial stress rather than encouraging investment in the 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 the government by domestic sale and exports.
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