PLI Scheme, Tax Breaks Essential To Cut Imports, Drive Agrochemical Manufacturing In India: ACFI

(MENAFN- KNN India) New Delhi, Sep 13 (KNN) The Agro Chem Federation of India (ACFI) has urged the government to introduce a production-linked incentive (PLI) scheme and tax holidays to reduce import dependence on technical ingredients and establish dedicated agrochemical manufacturing hubs.

The appeal was made during ACFI's 8th Annual General Meeting (AGM), where the industry body, in collaboration with Deloitte, released a knowledge paper.

At the meeting, ACFI also called for greater public–private R&D collaboration and measures to strengthen MSMEs in the sector, which is estimated at Rs 69,000 crore.

The report, titled“Ensuring the Availability of Quality Agrochemical Products to Farmers in India and Globally”, examines the crop protection chemicals industry, its regulatory framework, and potential measures to strengthen the sector.

It highlights India's growing role in global agrochemical exports, which reached an estimated USD 3.3 billion in 2024–25, up from USD 1.3 billion a decade earlier, making India the third-largest exporter after China and the United States.

Despite this growth, the industry remains heavily reliant on imports for key raw materials and technical products.

“Reliance on imports of technical inputs from China poses strategic risks, such as disruption in Chinese supply due to geopolitical tensions, trade restrictions, or factory shutdowns, which could create shortages or price spikes in India,” noted Parikshit Mundhra, Managing Director, Willowood.

The report also underlines challenges in manufacturing high-value ingredients domestically, citing technological gaps, high production costs, and environmental constraints.

To address these, ACFI has recommended fostering public-private R&D collaborations, scaling up MSME participation, and establishing manufacturing parks across the country.

Agriculture Commissioner and Registration Committee Chairman Dr. Praveen Kumar Singh stressed the need for an outcome-oriented approach in agrochemical innovation, with a focus on climate- and insect-resistant seed varieties and sustainable crop protection chemicals. He also called for greater emphasis on integrated pest management to minimise environmental impact.

"The government should introduce a Production-linked Scheme (PLI) scheme for the agrochemical sector, specifically targeting critical active ingredients and key intermediates that are currently imported in large volumes. This will help boost local production, foster self-reliance, and strengthen India's position in the global supply chain,” Rajeev Ranjan, Partner-Agri business, Deloitte India said.

Make in India incentives, supportive regulatory policies, and relaxed data requirements for export registrations are creating strong opportunities for multinational companies to transfer technology to Indian partners and expand manufacturing for exports. As a result, India is emerging as a potential hub for global exports, said Simon Wiebusch, Chairman, MD & CEO, Bayer CropScience Ltd.

Speaking at the session, ACFI's newly elected Chairman Rahul Dhanuka stressed that improving ease of doing business is essential not only for boosting agricultural production but also for achieving the goal of doubling farmers' income.

Adding to the discussion, Burjis Godrej, MD, Godrej Agrovet, advocated for the creation of agrochemical manufacturing parks across the country, promotion of collaborative R&D for developing new agrochemical molecules and processes, strengthening MSME capacity, and rolling out support programmes to drive sectoral growth.

(KNN Bureau)

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