India’s economy is red hot. Despite a global recession, the country has bolstered consumption, incomes, jobs, currency and investment. And the rising middle class is growing and fueling a prosperity like never seen before.
India’s Finance Ministry reported in August that the country’s GDP grew in the second quarter at 8.8% compared to the same period last year, and the government expects annual growth to exceed 9%, led largely on industrial manufacturing.
The country’s private sector is showing strong gains as a result of heightened consumption. The Bombay Stock Exchange’s Sensitive Index, or Sensex, topped 19,000 for the first time since January 2008, rebounding from a May 25 low by 20%, the level that signifies a bull market according to some analysts.
India’s relative prosperity is the envy of many developed countries that have struggled to enjoy meaningful economic recovery. For the first time in modern history, it will likely be emerging economies that lead a reversal of the global economy instead of the West. The International Monetary Fund said recently that major emerging economies like China, India, Indonesia and Brazil are, in fact, leading the global economic recovery.
But India’s tale among these other major developing economies is a bit different. Unlike its counterparts, India’s growth is fueled largely by domestic consumption instead of exports. Indian exports account for less than 20% of its GDP. Instead, growth in India is led by services, which is 55% of India’s economy and is enjoying close to double-digit growth. Manufacturing expanded almost 12.5% so far this year, and mining rose almost 9%.
Este fenómeno está afectando a casi todos los sectores de la economía, incluidos la electrónica, los automóviles, la vivienda y los servicios.
And agriculture is reaping its rewards as well. Although the sector is not experiencing the meteoric rise of other parts of India’s economy, its steady increases continue to cater to a rising middle class who increasingly demand more diversity in their diet.
Agriculture output in India is expected to rise about 3% this year, although an extended monsoon season is hampering the ability to update those estimates. Agriculture’s total share of GDP might be declining: Agriculture is responsible for 20% of India’s GDP, down from 50% in 1950. However, India still is an agrarian economy providing employment to more than 65% of the population, and the practice of crop diversification in India holds larger importance in light of the changing consumer preferences.
The changing food consumption patterns of India’s population is expected to grow the sector in real terms to $230 billion by 2013, and a richer diet will also instigate heightened purchasing of major commodities as diets shift increasingly toward more processed foods.
Of course, India’s robust crop protection sector is reaping the rewards of this burgeoning adoption of a more diverse diet. Largely fueled by the fungicide market for higher-value fruits and vegetables, Indian pesticide manufacturers are experiencing a boom that correlates to rising discernment of the middle-class palate.
In the past three years, India’s crop protection industry has enjoyed double-digit growth, rising at a rate of 10% to 15% per year, according to data from PMFAI (Pesticide Manufacturers and Formulators Association of India). The total industry reached more than $3.35 billion in global sales in 2009, more than half of which — $1.8 billion — was used for domestic consumption. Many industry players expect the value of the domestic market to continue to rise.
“Agriculture practices are changing in India,” says Abhimanyu Jhaver, director of Tagros Chemicals India, a $300 million company in Egmore, Chennai. “Farmers are starting to use more modern molecules, and cropping practices are changing, too. Even the multinationals are introducing new products to capitalize on this, which has never happened in India.”
Indian farmers are experiencing a sort of renaissance, with support from private industry, academia and the government. A new generation of farmer is making its way into the Indian heartland. Government subsidies for education, crop production and inputs have made farmers more profitable in recent years, in turn creating a perpetuating cycle of more education — especially for farmers’ children — and more sophisticated agronomic practices.
Combinado con la reforma agraria, se espera que estos agricultores mejor educados y cultivos más diversos marquen el comienzo de un período de rápida expansión para la agricultura y la protección de cultivos, cuyo valor se espera que duplique su valor para 2014. Hay 11 empresas multinacionales con presencia en India, junto con 60 productores de ingredientes activos y 450 formuladores. Aproximadamente el 80% de la cuota de mercado está controlado por productos genéricos.
“Over a period of time, we are going to see a consolidation of land happening in India,” says Vijay Mundhra, director of Willowood Limited, which is based in Hong Kong but does its research, development, manufacturing and a majority of its sales in India. “More corporate groups are getting into farming, so there is going to be significantly greater use of modern techniques.”
India has already been a large user of insecticides, largely due to its huge cotton cultivation. Insecticides represent almost 60% of the country’s total domestic-use value, although the insecticide market is shrinking as the adoption of : Bt el algodón sigue subiendo.
The fungicide market is growing rapidly as well as a result of higher-quality fruits and vegetables making their way to the tables of India’s middle class. Second to China, India is the largest producer of fruits and vegetable in the world with 11.7 million hectares in cultivation, roughly 10% of global production.
“We are planning to introduce more fungicide combinations from group companies in India (to meet domestic need),” says Dinesh Prajapati, director of registrations and regulatory affairs for Productos químicos de Punjab en Mumbai.
Los herbicidas podrían ser el sector de mayor crecimiento en India. El aumento de los ingresos en los sectores manufacturero y de servicios ha creado más opciones de empleo en todo el país, lo que dificulta la búsqueda de mano de obra agrícola. Esto, combinado con familias más pequeñas, está creando una adopción más amplia del deshierbe químico.
“The only answer in an economy where workers no longer want to do field labor is for farmers to use modern agriculture,” Mundhra says.
La India, hasta ahora, no ha estado preparada para la pérdida de mano de obra en la agricultura; Aproximadamente un tercio de las pérdidas de cultivos en 2009 se atribuyeron a un mal manejo de las malas hierbas.
Las perspectivas de crecimiento en los mercados de herbicidas y fungicidas son tan favorables que los principales fabricantes están invirtiendo en su infraestructura para satisfacer la creciente demanda y evitar la competencia dentro del país también.
Punjab Chemicals adquirió IA & IC Chem Ltd. en 2006 para obtener una instalación moderna para fabricar formulaciones de WDG que son cada vez más populares entre los agricultores indios. En la actualidad, la empresa puede producir formulaciones modernas de azufre WDG, hexaconazol y metalaxil, y está desarrollando formulaciones de tebuconazol.
“We have a strong team that works with dealers, distributors and development that has resulted in better coverage of the domestic market,” Prajapati says. “Now we are in the process of developing newer, more effective fungicide combinations to combat the phenomenon of resistance, if any.”
Se espera que continúe la consolidación de las instalaciones, pero Willowood está creciendo de manera más orgánica en la India. Willowood está en proceso de construir instalaciones de fabricación e investigación para complementar sus operaciones actuales. La compañía planea construir una planta de síntesis en India, así como una instalación de investigación y desarrollo con suficiente área plantable para realizar pruebas de campo de sus formulaciones.
El desafío para los fabricantes indios sigue siendo el registro de productos. Actualmente, la India registra unos lamentables 194 productos, según PMFAI, menos de la mitad de los países vecinos de Pakistán (495) y otras economías emergentes.
“The government is emphasizing the need for increased agriculture production to meet the demand of current trends as well as the demands of an increasing population to ensure food security and to compensate for possible agricultural shifts due to climate change,” says Plaguicidas AIMCO Managing Director Elizabeth Shrivastava, who cited Prime Minister Manmohan Singh’s recent address that called for the country to double the farm growth rate.
“For this to happen, farmers must have access to new technologies and products more quickly,” she says. “Considering our diversity of crop, regions and pest complexities, we need more new products and the best crop protection technologies that are available to the rest of the world.