Industry’s view on changing dynamics of Indian agrochemical sector
Agriculture continue to remain central to the Indian economy, contributing nearly 18% to our GDP. In India more than 50% of the population still depends on Agriculture for livelihood. As a result, a sectors like seeds, fertilizers, agrochemicals have a far reaching impact on Indian economy, driven by major government interventions and actions.
Indian agriculture sector faces some of the unique challenge like monsoon dependency, low productivity, lack of awareness of input use, low arable land, declining soil fertility, water scarcity and high post-harvest loss. Every year around 20% of crop output is lost due to attacks by weeds, diseases and pests worth INR 45,000 crores. Population of India is currently at 1.3 billion and is likely to rise to 1.7 billion by 2050. With the growing population, India will not only have to raise its agricultural production, but also the productivity to ensure its food and nutrition security. For sustainable agriculture, efficient use of crop protection solutions plays vital importance.
Indian crop protection industry is 4th largest in the world with a value of ₹40,000 crore divided almost equally, between India’s domestic consumption and exports. But in spite of its huge market, agrochemical consumption per hectare amounts to 0.6kg /ha, that is significantly low as compared to global norms. Insecticides dominate the crop protection industry in India with about 50 per cent market share followed by herbicides & fungicides. One of the factor for low yield per hectare is attributed to inadequate crop protection measures. Increasing population and everincreasing demand for food necessitate the use of agrochemicals to increase the productivity.
With increase in awareness regarding environment conservation, the industry has also introduced various eco-friendly pest management products. The industry has been educating consumers that all chemicals are not harmful and also working on increasing awareness about judicious use of chemicals and good agricultural practices (GAP) at the farmers level.
Due to low level of agro chemical consumption in India as compared to global norms, agro chemical industry has huge unrealized potential for growth. Besides increasing in domestic consumption, the exports by the Indian Agrochemicals Industry can be doubled in the next four years if the right strategies and technologies are adopted by the industry. The role of agrochemicals in achieving the vision of USD 5 trillion economy by 2025 cannot be undermined, as it not only ensures food security, provides livelihoods but also provides impetus to the growth of industries and service sectors. One of the key challenges for many companies is high R&D cost, as it takes 8-10 years to develop a new molecule and is also very expensive affair. Many companies in India typically have not focused on developing newer molecules and are facing challenges in building these capabilities, while continuing to remain cost competitive. Govt intervention in the area of improving certain infrastructures like pesticides testing laboratories, improving sampling process, strengthening of registration and importing process will boost the right investment and also help in the growth of agrochemical industry.