Finance Minister Nirmala Sitharaman is set to unveil the Interim Budget 2024-2025 on February 1, 2024, at 11:00 am in the Parliament. While the major populace awaits potential changes in the tax slab, the agrochemical industry is aiming for increased budgetary support, aiming to align with the government's ambitious goals of 'Make in India' and 'Aatmanirbhar Bharat'. Leading voices from the Crop Care Federation of India (CCFI) emphasize the urgency of measures that would bolster local manufacturing, reduce import dependency, and solidify India's standing in the global agrochemical market.
R D Shroff, Chairman Emeritus of CCFI, highlights the imperative for India to secure a significant share in global agrochemical trade. He said, "The focus of the budget should be to ensure that agrochemicals earn a share in the global trade. With increased import bills, and increased global competition in the domestic market, earning foreign exchange is the need of the hour for this Champion sector”
Deepak Shah, Chairman of CCFI, stresses the necessity of raising customs duty on agrochemical imports. Currently, standing at 10 percent, Shah asserts that this figure serves as a disincentive for Indian manufacturers and depletes valuable foreign exchange.
“There is an imperative need to increase customs duty on import of agrochemicals both on technical and formulations from existing 10 percent which is a disincentive for Indian manufacturers and draining our valuable foreign exchange,” he said.
Budget 2024 Indigenous Manufacturing
The post-budget reflections on the agrochemical sector resonate with the industry's call for enhanced indigenous manufacturing. While the agricultural sector received renewed focus in the previous budget with initiatives like Kisan Drones and Sovereign Green Bonds, the agrochemical industry seeks targeted support.
The industry contends that the current import duty structure, with raw materials taxed at 7.5 percent and finished products at 10 percent, requires adjustment to benefit local manufacturers and diminish import dependence. Proposals include the introduction of a Production Linked Incentive (PLI) scheme and an increase in customs duty on formulations from abroad. These measures, industry leaders argue, would incentivize local production, reduce dependency on imports, and align with the government's Make in India initiative.
“All generics which constitute 80 percent globally can enhance their production to not only meet domestic demand but also exports which have now crossed Rs 44,000 crore. We expect another fresh investment of Rs 12,000 crore in the next 3 years provided a favorable decision is taken on priority. Postponing expansion plans should be expedited for the benefit of Indian manufacturers and, in turn, the farming community globally as we become an unparalleled exporting destination” emphasized Mr. Rajesh Aggarwal, Vice Chairman, of CCFI.
Budget 2024 For Agriculture Relaxation in GST
In addition, the industry advocates for a reduction in GST on pesticides from 18 percent to 12 percent, bringing parity in taxation on agro-inputs. This move is framed as essential in mitigating annual losses of approximately Rs 90,000 crores due to pests and diseases, offering a lifeline to farmers and fostering increased agricultural production.
The agrochemical sector urges the government to support technological advancements for intermediates and technical-grade pesticides under the 'Make in India' program. As the nation grapples with climate risks and an expanding population, a concerted effort to increase agricultural output becomes imperative.
