India's Agrochemical Imports Surge 53% in 5 Years; Industry Demands Higher Tariffs

The Crop Care Federation of India (CCFI), a 60-year-old authoritative industry body representing 50 major domestic agrochemical manufacturers, has urgently petitioned the Union Finance Minister to substantially raise import duties on agrochemical products. CCFI Chairman Deepak Shah warned that the import surge-which has grown 53% from ₹9,096 crore in FY2019-20 to ₹13,998 crore in FY2024-25-is undermining local manufacturers and contradicting the government's 'Make in India' initiative, despite over ₹40,000 crore in domestic investments.

1. Underutilized Domestic Capacity

 - Nearly 50% of India's formulation production capacity lies idle due to unrestricted imports of both finished formulations and technical-grade pesticides, primarily from multinational corporations and bulk-trading resellers.

2. Tariff Disparity & Unfair Competition

 - India, now the world's second-largest pesticide exporter (surpassing the U.S.) with an 85% share in generic agrochemicals, faces inverted tariffs:

 - Current duty: 10% on finished formulations vs. 20% on technicals.

 - CCFI's demand: Raise to 30% on formulations and 20% on technicals, maintaining a 10% differential to incentivize local manufacturing.

3. Quality and Safety Risks

 - Imported formulations may contain expired or substandard active ingredients with untested toxicity profiles, posing environmental and health hazards.

 - No value addition, job creation, or rigorous quality checks accompany these imports, yet they cost farmers more.

4. Global Trade Imbalance

 - Exporting countries enjoy 9–16% subsidies, creating an uneven playing field. CCFI urges matching incentives (e.g., duty drawbacks) for Indian manufacturers.

- Stricter Regulations: Mandate registration of technical-grade equivalents for all imported formulations, subject to equal scrutiny as domestic products.

- HSN Code Reform: Introduce dedicated Harmonized System Nomenclature codes for agrochemical imports to improve tracking and enforcement.

- Foreign Exchange Conservation: Local production could save billions in forex reserves currently spent on unnecessary imports.

- Pesticides account for <1% of total farm input costs; tariff hikes would minimally impact farmers.

- India's pesticide use (380g/hectare) is among the world's lowest, suggesting room for responsible domestic expansion.

"Protecting domestic manufacturing through revised tariffs and import controls is critical to realizing 'Aatmanirbhar Bharat' (Self-Reliant India). This safeguards farmers, boosts jobs, and positions India as a global agrochemical hub."