What's Happening?
The Agro Chem Federation of India (ACFI) has called for the introduction of a Production-Linked Incentive (PLI) scheme to boost domestic agrochemical manufacturing and reduce reliance on imports. During their Annual General Meeting, ACFI, along with Deloitte, released a report emphasizing the need for tax holidays and the establishment of agrochemical manufacturing hubs. The report highlights India's significant role in agrochemical exports, valued at USD 3.3 billion in 2024-25, making it the third-largest exporter globally. However, the industry remains dependent on imports for key raw materials, posing strategic risks due to potential supply disruptions from geopolitical tensions or trade restrictions.
Why It's Important?
The proposed PLI scheme is crucial for enhancing India's self-reliance in agrochemical production, which is vital for agricultural productivity and the global food supply chain. By reducing import dependence, India can mitigate risks associated with external supply shocks and strengthen its position in the global market. The initiative could also foster public-private R&D collaboration and support MSMEs in the sector, contributing to economic growth and stability. The move aligns with broader efforts to double farmers' income and improve the ease of doing business in the agricultural sector.
What's Next?
If implemented, the PLI scheme could lead to increased domestic production of high-value technical ingredients, reducing strategic vulnerabilities. The government may need to engage with industry stakeholders to design effective policy measures and ensure the scheme's success. Additionally, fostering R&D collaboration and supporting MSMEs will be critical to achieving the desired outcomes. The initiative could also prompt other countries to adopt similar strategies to enhance their agrochemical sectors.
