Pradip Dave, President, Pesticides Manufacturers Formulators Association India (PMFAI) & Chairman, Aimco Pesticides Limited.

Pradip Dave, President, Pesticides Manufacturers and Formulators Association of India (PMFAI) & Chairman, Aimco Pesticides Limited

10:57 AM, 16th October 2017
Pradip Dave, President, Pesticides Manufacturers and Formulators Association of India (PMFAI) & Chairman, Aimco Pesticides Limited.

Sowing a green growth story

In an interview, Pradip Dave with Chemical Today Magazine gives a holistic growth story of agrochemicals and crop protection industry in India.  

By Shivani Mody

Trends in the agrochemicals and pesticides industry.

The emerging trends for Agrochemicals/Pesticide Industry are good. The next generation Agriculture in the country will include all possible sustainable solutions for crop protection which will include Crop Protection Chemicals, Biotechnology and Seed treatment. The sector faces many challenges but the solutions for the same will lead India in becoming a global manufacturing hub for quality Pesticides/Agrochemicals. Govt. of India is also encouraging and promoting the concept of "Make in India" and thereby manufacturing in India, and effective steps taken in that direction will boost Indian Agrochemical industry. 

Opportunities for the agrochemicals and pesticides industry in India. 

In India, use of Herbicides and Fungicides are increasing. But consumption of agrochemicals in India is still one of the lowest in the world. Currently per hectare usage of agrochemical formulations in India is only 0.6 kg/ha against 5-7 kg/ha usage in UK; 13 kg/ha usage in China & Japan; 4.5 kg/ha usage by US and world average usage of 3 kg/ha.

Only 25 to 30 percent of cultivated area in India comes under crop protection umbrella. Government's own estimate puts annual crop losses due to pests and diseases in India over Rs 90,000 crores. While our population at present stands at 130 crores, it is expected to reach 150 crores by 2030. There is a dire need to pace our agricultural production, particularly in an era of climate change and ever reducing farmland due to urbanization and housing needs, which forces conversion of agricultural land to non-agricultural usages.

Agrochemical industry has a key role in Indian Agriculture to minimize crop losses due to pests and diseases and to increase agricultural productivity of the country, which can contribute to balance the growing needs. The scenario provides greater scope for growth of the industry in coming years.    

Export potential in India for agrochemicals and pesticides industry. 

Export of pesticides from India has seen strong growth in recent years. India is one of the largest exporters of pesticides to world market, which mainly constitutes Generic pesticides. Presently Indian pesticide industry is 4th largest in the world after US, Japan and China and in Generic Pesticides production, India stands at No 2 in the world after China.

Presently India exports pesticides worth Rs 13,000 crores to world markets.  Agrochemicals worth $4.1 billion are expected to go off-patent by 2020. This will provide opportunities for Indian Agrochemical Industry to increase their exports, which has greater expertise in Generic segment. The product areas mainly will include Insecticides, Herbicides and Fungicides.

Impact of ban on 18 pesticides by Union Government.

The final decision in this regard is still pending as the Government has received large number of objections against the notification issued in that regard. The 18 pesticides proposed to be banned are all Generic Pesticides having large export scope. The very reason for given for review – “review of products banned in one or more countries” itself is wrong. If a product is banned in any other country for any cause or concerns, Expert Committee must have the scientific approach to first determine relevant issues of concern, and their relevance in Indian context, then ask Indian registrants to address that concern. There must be some parameters for review. Moreover the manufacturers have not been given opportunity by the Review Committee to defend their respective products.

Exploring potential available due to products going off-patent.

As mentioned above, this will be good opportunity for Indian companies as Indian Companies have greater expertise in Generic segment. Access to new off-patent products and innovations could help Indian companies provide new molecules to Indian Farmers as well as export to international markets.

PMFAI had filed a case in Gujarat High Court against CIB&RC policy guidelines allowing registrations for "imports of readymade Pesticide Formulations without registering its Technical Grade Pesticides" in the country. Though "deemed registrations" for Technicals were granted for 3 years under this guidelines, the  Importers were deliberately not registering the Technical Grade pesticides in India even after 3 year period of deemed registrations, with an intention to continue monopoly in Formulations based on such Technicals and avoid competitions from Indian companies.  In the matter, Gujarat High Court given directives to the Government to frame guidelines more transparent as well as more effective so as to provide equal treatment to the indigenous manufacturers as well as importers who are importing such pesticides manufactured outside India. CIB&RC framed new guidelines - TIM (Technical Indigenous Manufacture) v/s. FI (Formulation Import) which allow indigenous manufacturers register the Technical Grade Pesticides and its Formulations by submission of required data.  From April 2016 Registration Committee started implementing the new guidelines and granted registrations to Indian companies for Bispyribac Sodium Technical and Bispyribac Sodium 10 percent SC formulations.  This has resulted in Indian manufacturers selling the Herbicide Bispyribac Sodium 10 percent SC formulations at a price of Rs 3500 per liter which earlier were sold by importers at Rs 8000 per liter.

Advancement and growth drivers for synthetic pesticides.

Global Synthetic Pesticides market is mix of strong performing segments such as Herbicides and Fungicides and less used Insecticides. Increase in Insecticides sales is expected to occur mainly in developing regions most notably Brazil and other Central and South American countries. According to trends global market of Synthetic Pesticide should reach $71.00 billion by 2021 from $56.2 billion in 2016.

Market potential of agrochemicals and pesticides in developed vs the emerging markets.

Global Agrochemical Market is mainly concentrated in the major developed countries such as US and European nations. Europe has the largest share in the Agrochemical market followed by Asia, Latin America and North America.

Herbicides are most widely used Agrochemical products globally, followed by Insecticides and Fungicides. Fungicides are the highest growing segment which helps to increase the yield, improving quality and in seed treatment.

While developed markets mainly use Herbicides and Fungicides, developing regions mainly use Insecticides.  But usage of Herbicides and Fungicides are increasing.

R&D and innovation in agrochemistry.

Research & Development for new molecule discovery by Indian companies is at a very low key, as Indian companies spend only 1-2 percent of the revenues for R&D against global MNCs which invest about 8-10 percent, which needs improvement. With a large number of molecules getting off-patent in 2 years, we expect more innovations to bring out newer formulations from Indian companies.

Challenges in the agrochemicals and pesticides industry.

As far as India is concerned, allowing registrations for imports of readymade pesticides formulations to the country is real threat, which will harm the growth of indigenous manufacture particularly MSMEs. Surprisingly basic Customs Duty applicable on imports of readymade pesticide Formulations (finished product) is 10 percent, same as on Technical Grade material is working against the indigenous manufacturers and the concept of ‘Make in India.’ The policy needs to be corrected by the regulatory authorities. Restrictions also need to be brought on imports of not only Formulations but also Technical Grade pesticides which are already manufactured in the country.

Pesticides registration guidelines impact for the industry.

Pesticides regulation in India is one of the most stringent in the world, which many times create undue delays in granting of registrations.

Fast track Export Registrations with minimum data requirements is another area which lacks attention of the authorities as export orders are very time-bound depending on Agriculture Season in different countries and timely delivery is very important, otherwise customers will look for suppliers from other countries.

Central Insecticides Board & Registration Committee (CIB&RC) will be implementing "Improved/Harmonized Guidelines for Registration of Pesticides in view of Make in India initiative of Government of India" which is expected to encourage domestic manufacturing and restricting imports.

As mentioned earlier, another area of concern is allowing Registrations for Imports of readymade Pesticides Formulations without registering Technical Grade Pesticides in the country which needs to be stopped. No major agricultural nations in the world follow such a system including USA, Europe, Brazil, China, Australia and Argentina, then why India? This will not only harm interests of indigenous manufacturers but also will make way for flow of sub-standard pesticides to the country harming Indian Agriculture and environment.

GST implementation impact on the agrochemicals and pesticides industry.

The government of India decided to impose 18 percent GST on Pesticides/Agrochemicals, which is a hike of 6 percent from the earlier Excise duty of 12 percent is likely to affect the pesticide industry and the Farming Community.

On the one hand, Government is talking about the need for supporting Agriculture sector and Doubling Farmers Income by 2022 and on the other hand imposing levy of 18 percent GST on pesticides, which is one of the key agri inputs used by farmers to protect their crops from the ravages of pests and diseases. This is not at all in conformity with policies of Doubling Farmers income.

It is pertinent to note that Agri inputs other than pesticides like Fertilizers attract only 5 percent GST. We have appealed the Government for minimum Taxation of 5 percent GST on pesticides.

© Chemical Today Magazine


See the Interview in Chemical Today magazine

https://www.worldofchemicals.com/digitalissue/chemical-today-october-2017/24

View the magazine on Mobile, download the Chemical Today magazine app

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