Introduction:

The Indian agrochemical industry has been witnessing a profound transformation in recent times and is not without the strategic interventions of Indian governments. They have fostered unprecedented growth, innovation and sustainability across the sector and remain a lifeblood of India’s economy by strengthening the agrochemical industry. Through this article, we appreciate the efforts and effectiveness of the initiatives and policies and all the technological developments attained. If you are interested in knowing how government policies are shaping the future of the agrochemical industry and thereby agriculture, then please continue to read. Let’s get started.

Factors stimulating the growth of the agrochemicals industry:

The Indian agrochemical sector has witnessed incredible growth in recent decades and is considered one of the most powerful contenders in the global market. The export size of the industry in 2022 was USD 5.5 billion and is expected to surpass USD 14.5 billion by 2027 or 2028.

In 2022, India ranked as the second-largest exporter of agrochemicals globally, based on the reports by the World Trade Organization. The total value of the exports was at USD 5.5 billion and the surging exports are expected to impact the sector’s revenue and increase it by 10-12% in 2024. Thus the robust export figures and steady domestic demand are the two factors impacting the overall growth of the agrochemicals sector.

While India’s prospects as a major manufacturing hub remain strong, the comprehensive road map, collaborative partnership and regulatory compliance are the factors that are building the agrochemicals industry stronger. Likewise, the abundant pool of skilled human resources of the nation also plays a significant role in the growth of the agrochemicals industry.

India possesses the most unique geographical advantage, combined with major refineries, and petrochemical plants. These factors have enabled easy access to petrochemical feedstock and key demand centres of the country. The growing income levels, youthful population and other aspects have fuelled the consumption-driven economy thereby driving demand across multiple sectors.

The leading Indian manufacturers come forth to offer competitive pricing for generic agrochemicals, and related products and building supporting features to make the country a better place for agrochemicals manufacturing. Indian agrochemical industry has already established world-class manufacturing facilities to meet both domestic and global demand. In addition to the developments, the new manufacturing plants have only reduced the import of agrochemicals in the long term.

Specifically, the agrochemical products from India are exported to several developed countries like the USA, and Brazil for occupying above 50% share of the 5.3 billion dollars and the establishment has made the country one of the leading exporters to over 140 countries across the globe.

Key growth drivers expected in 2024:

Climatic conditions across the nation in 2023 caused a 1.8% drop in Gross Value Added (GVA) in agriculture. Despite the drop and unfavourable conditions, it was expected that the farmers would still use up their stocked supplies and help ease the tightness and concerns about working capital. Thus, we can't expect the sector to witness strong growth for quite some time due to current excess inventories and steady consumption at the farm level can be expected to continue.

Nevertheless, the increased economic activity in rural areas has a ripple effect and enhanced the overall demand for agrochemicals. Since the rural markets have become more vibrant and the agrochemical companies have expanded their distribution networks across the nation, they have tapped into these growing markets.

Governmental initiatives that are supporting the Agrochemicals industry:

Make in India:

The NDA government aims to include strategies that improve and develop the efficiency of fertilizer subsidy administration. The Department of Chemicals and Petrochemicals secretary talked about their goal and vision to ensure that they are working towards the growth of both the industry and economy and assured that they will not take any step that doesn’t benefit the industry.

Make in India initiative plays a crucial role in supporting the agrochemical industry, as it has reduced regulatory hurdles and facilitated the upgradation of the necessary infrastructure. It also enabled the nation to become a global hub for the manufacturing of agrochemical products. Overall, the government and industry have invested heavily in research and innovation to develop new molecules, manufacturing processes and green chemistry products.

India’s growth in the agrochemical sector is due to the investments of Indian companies in the production of off-patent molecules thereby reducing the imports from China.

Indian manufacturers have been focusing on the quality and cost-effectiveness of producing compounds that are used as insecticides in agriculture. For example, Malathion, Parathion, Chlorpyrifos and other compounds work by inhibiting essential enzymes for nerve functions in insects’ paralysis and death.

The “Make in India” scheme emphasized ease of doing business and enabled faster clearances, regulatory reforms, tax incentives for manufacturers and other aspects. The supportive environment has helped in the surging of local manufacturing of pesticides, fertilizers and other agrochemicals.

The Agrochemical industry promoted local production and the scheme reduced the country’s dependency on agrochemical imports, especially from China. Domestic companies have the opportunity to manufacture active ingredients and formulated products which has led to better control over quality and pricing.

The scheme also helped in increasing manufacturing, research and development, production, distribution and other processes involved in the agrochemical sector.

Let’s consider: UPL Limited:

UPL Limited is one of India’s largest agrochemical companies that has leveraged the “Make in India” initiative for their expansion of manufacturing footprint. The company has invested in the construction of new production facilities in different states such as Gujarat, that became a hub for agrochemical production. With the support of the initiative, the company has significantly increased their production of insecticides, herbicides, and fungicides that catered not only to domestic needs but also to export markets.

The company has invested significantly in their research and developments under the “Make in India” scheme and developed new effective formulations. The company now celebrates the successful applications of the new formulations which are both safer for the environment and more effective against pests and crop diseases.

PI industries:

PI Industries is considered one of the leading market players in the agrochemical sector as they have expanded their manufacturing in India by setting up plants in Gujarat and Rajasthan under the “Make in India” scheme. This development has helped the company to enhance its production capacity of active ingredients and formulated products.

The company has also established state of art R&D centres in Udaipur and Jambusar and these centres are deeply involved in developing new molecules, synthesis processes and formulation technologies. These centres focus on the processes that are well-suited for Indian Agriculture. “Make in India” facilitated collaboration between PI industries and global innovators that are leading to advanced product development.

PM- Kisan scheme:

The goal of the PM-Kisan scheme is to provide income support for the farmers and direct financial assistance to small and marginal farmers. The idea is when the farmers have regular income support, it gives them more purchasing power to invest in crucial inputs such as agrochemicals, fertilizers, and seeds. This has significantly increased the demand for these products and created a better environment for the growth of the agrochemical industry.

The consistent income support also has helped the farmers to afford higher quality inputs that lead to higher productivity and increased the overall use of agrochemicals thereby benefiting the manufacturers and distributors of the sector. The key aspect of the PM Kisan scheme is to cover all farmers across the country with minimal exclusions, which can be termed as universal coverage. Therefore, the scheme has resulted in an expanded market growth for agrochemical products.

Similarly, the scheme is designed for timely disbursement of funds that are aligned with the key agricultural seasons. This also ensured that the farmers had required resources when they needed them the most, such as sowing season. The idea is to help the farmers ensure effective pest and disease management and timely application of agrochemicals thereby improving crop yields and reducing losses.

The government has also thought about how the scheme works with other schemes that are already functioning. The other schemes that are related to agriculture and agrochemical sectors are the Soil Health Card Scheme, PM Fasal Bima Yojana Scheme, and National Mission on Sustainable Agriculture schemes. Therefore, the proper alignment and connection of all the schemes have created a holistic approach thereby improving agricultural productivity.

The combined effect of the complementary schemes has increased awareness among the farmers and the beneficiaries. For instance, these schemes have helped them acquire better soil health knowledge which has led to more informed decisions about fertilizer usage, demand for specific agrochemical products and so on.

Atmanirbhar Bharat Abhiyan scheme:

The Atmanirbhar Bharat Abhiyan scheme is also referred to as the Self-reliant India Campaign due to its comprehensiveness. The scheme is launched by the Indian government to make the nation self-reliant in varied sectors such as agriculture and agrochemicals. The scheme has had several notable effects on these industries as it reduced the dependency on imports.

The goal of the scheme is to reduce the requirement to import agrochemical products and raw materials. The scheme has increased the production capacity of the Indian agrochemical companies and built the nation more self-reliant with enhanced capabilities to meet domestic demand.

The huge effect of the Atmanirbhar Bharat Abhiyan Scheme is that it has stimulated self-reliance and has encouraged agrochemical industries to invest in research and development. This has led to creativity and innovative products thereby creating specific needs of Indian agriculture and crop-specific and eco-friendly alternatives. Overall the scheme has helped the development of more sustainable and efficient agrochemical solutions that are crucial for long-term agricultural productivity.

The scheme has created economic resilience fostering the local industries and generating employment. In the agriculture sector, the scheme has translated into job creation in the agrochemical manufacturing, distribution and related industries. From a bird’s eye view, the scheme has helped with local production, and supply chains have become more robust too.

The scheme has also improved the distribution network in some states. For instance, Uttar Pradesh is considered one of the largest agricultural states with a diverse range of crops. Therefore the state requires timely access to agrochemicals and suffers when there are delays in receiving agrochemicals products which also affects crop yields.

However, after the establishment of the Atmanirbhar Bharat scheme, the government invested in upgrading the transportation infrastructure that covers rural roads and storage facilities. This factor allowed agrochemical companies to streamline their distribution networks.

Improving infrastructure included the development of roads and storage capacity, companies like UPL Limited and Coromandel International were able to deliver agrochemicals more efficiently, even during peak agricultural seasons.

Farmers in remote areas of Uttar Pradesh were delighted as they are now receiving agrochemical inputs on time, particularly during critical periods like sowing and pest outbreaks. These factors have contributed to higher crop yields and reduced losses from pests and diseases, directly benefiting the farmers' income. Therefore all of these combined to benefit the demand of the agrochemical industry.

Meanwhile, Punjab, which is a major agricultural state has high demands for agrochemical products, especially during the wheat and rice seasons. However, the state suffers from the challenge of maintaining the efficacy of certain agrochemical products during extreme weather conditions.

The cold chain ensured preservation strategies and techniques of these pesticides and fertilizers. The production and delivery of temperature-sensitive agrochemicals, such as bio-pesticides, and liquid fertilizers have remained effective until they reach the farmers.

Soil Health Card Scheme:

The soil health card scheme gets the farmer a complete list of soil nutrients and general soil health on their land. Therefore, the scheme helps in the improvement of proper farming practices and soil management techniques for increased productivity and income.

With the soil health card, the farmer can discern before sowing anything on their farmland. With the card and the report of their farmland, they will receive a regular soil nutrient report and detailed report with details such as suitable crops for specific seasons specific nutrient combinations of their land and so on.

They will also get assistance from the experts if the farmers need it. They will also receive training in varied soil management practices and thereby improve their soil profile over the years and then increase their productivity.

The report also shows the farmers the nutrients that are lacking in their soil and thus they have to take initiatives to supply only those nutrients to maintain soil health. Overall, the scheme helps improve the economic condition of the farmers by eliminating the purchasing of unnecessary fertilizers or nutrients for their farmlands.

Since the Soil health card scheme has developed a more targeted approach to soil management, they have educated the farmers and armed them with complete soil health data. Therefore the farmers have become more selective in their use of fertilizers and other agrochemicals. This has developed a pattern of customizing the agrochemical products to specific soil needs.

The agrochemical companies have also responded to this call by developing specialized products such as micronutrient-enriched fertilizers, soil conditioners and bio-fertilizers to cater to specific needs. The customized plan and pattern have helped the agrochemical manufacturers as well to limit their productivity based on customer preferences. On the other hand, this has led to the development of new markets and product lines within the industry.

The scheme has encouraged balanced fertilization that involves the right mix of macro and micronutrients. This approach has elevated the focus from overusing well-known fertilizers such as urea and shifted to a more balanced and varied application of nutrients.

In recent times, due to this approach, agrochemical companies have expanded their portfolios and included these balanced nutrient products driving growth in this segment.

National Mission on Sustainable Agriculture (NMSA):

The National Mission on Sustainable Agriculture scheme is one of the most prominent missions under the National Action Plan on Climate Change (NAPCC). This scheme has the goal to encourage sustainable agricultural practices and that works even on climatic changes. The goal is to mitigate the effects of greenhouse gas emissions and thereby promote efficient use of resources such as water, soil and nutrients.

The key component of the scheme is to emphasize soil fertility management, micronutrient deficiencies, organic farming and health restoration.

For instance, The IIFCO – Indian Farmers Fertilizer Cooperative recognized the scheme’s emphasis on sustainable agriculture and soil health as an opportunity to expand its portfolio of organic fertilizers and biopesticides. IFFCO is working towards developing efficient eco-friendly agrochemicals that support sustainable farming practices. They have succeeded in developing and marketing organic fertilizers such as “SAGARIKA” and bio-pesticides that are in line with the NMSA scheme and the environmental impact of farming. The products are catering to the increasing demand for sustainable inputs among Indian farmers.

The scheme has helped the areas where organic farming is gaining traction. Meanwhile, the scheme has not only benefitted the farmers but also positioned the cooperative as a leading player in the sustainable agriculture market thereby driving growth in the emerging sector.

Similarly, Bayer Crop Science is known as a global agrochemical leader with a strong presence in India and has aligned its mission and goals including its product development strategies with the NMSA’s concept, which is on water-efficient agriculture. Now the company is celebrated for their agrochemical solutions that help farmers optimize water usage which is crucial for regions that are facing water scarcity.

The company has introduced products such as “Sivanto Prime” that received good apprehension in the market. The crop protection solution is designed to be effective even with limited water usage and meanwhile, they align with the NMSA goal of promoting water-efficient agricultural practices.

Key takeaways, as we look ahead:

India has seen a significant increase in the profits of the agriculture chemical companies in the past year 2023. Companies are now utilizing new technologies to develop more efficient and cost-effective solutions and strategies to further improve the sector and impact the economic conditions of the country. Therefore the demand for organic products is increasing among consumers and the inclination towards organic farming is also growing. These well-prepared and planned governmental schemes and plans are only accentuating the Indian agricultural and agrochemical sector through subsidies, tax benefits and other ways.