Agro Chem Federation of India Calls for PLI Scheme to Boost Domestic Agrochemical Manufacturing

What's Happening?

The Agro Chem Federation of India (ACFI) has called on the government to implement a Production-Linked Incentive (PLI) scheme and offer tax holidays to reduce reliance on imported technical ingredients and establish agrochemical manufacturing hubs. This initiative aims to enhance domestic production and strengthen India's position in the global agrochemical market. ACFI, in collaboration with Deloitte, released a knowledge paper during their Annual General Meeting, which highlighted the industry's current challenges and proposed measures to boost the sector. The report emphasized India's significant role in agrochemical exports, valued at approximately USD 3.3 billion for 2024-25, making it the third-largest exporter globally, following China and the US. However, the industry remains heavily dependent on imports for key raw materials, posing strategic risks due to potential geopolitical tensions and trade restrictions.

Why It's Important?

The proposed PLI scheme is crucial for reducing India's dependency on imports, particularly from China, which poses strategic risks such as supply disruptions and price volatility. By fostering local production, the initiative could enhance self-reliance and secure India's position in the global supply chain. This move is also expected to boost agricultural productivity and contribute to the global food supply chain. Additionally, promoting Public-Private R&D collaboration and supporting MSMEs in the sector could lead to technological advancements and economic growth. The initiative aligns with the broader goal of doubling farmers' income by improving the ease of doing business in the agricultural sector.

What's Next?

The ACFI's recommendations, if adopted, could lead to significant policy changes aimed at bolstering domestic agrochemical production. The government may consider introducing the PLI scheme and other supportive measures to address the industry's challenges. Stakeholders, including policymakers and industry leaders, are likely to engage in discussions to evaluate the feasibility and potential impact of these proposals. The outcome of these deliberations could shape the future of India's agrochemical industry and its role in the global market.