Agrochemical makers are looking forward to the uniform basic customs duty, rationalisation of GST and introduction of the 200 per cent deduction on R&D expenses in the forthcoming Budget.
CropLife, a body of agrochemical makers has suggested key measures to the government such as maintaining a uniform basic customs duty of 10 per cent for both technical raw materials and formulations and reduction in GST on agrochemicals from the current 18 per cent to 12 per cent. Providing a 200 per cent weighted deduction on R&D expenses for agrochemical companies would enhance focus on innovation and R&D, which will enable farmers to access newer and greener crop protection products, it said.
The Chairman – CropLife India and Managing Director of Crystal Crop Protection Ltd said “The Budget 2025-26 should focus on reforms aimed at increasing the farmers’ income through increasing the productivity and fostering the inclusive and sustainable growth of the agriculture sector. Newer and greener crop protection products are required to tackle the emerging challenges. The availability of new formulations through import —whether single molecules or their combinations—plays a crucial role in helping farmers to address the resistance developing in pests and impacts of climate change, and enhance the global competitiveness of Indian agricultural produce. As these innovative solutions are adopted by farmers, local manufacturing begins, further supporting the ‘Make in India’ initiative. What starts as formulation imports eventually transitions to domestic manufacturing, first of the formulations and then of the technical products in India”.
Further he added, “We request the government to create an ecosystem around the science-based, progressive, and predictive regulatory framework that will allow the sector to become globally competitive and reach its full potential. It is crucial that we move away from a dual policy approach that restricts formulation imports in India while simultaneously promoting formulation exports.”
The President, FMC India said the Budget must prioritise investments in agricultural research and development (R&D), with a focus on developing new, climate-resilient crop varieties. “We also believe that the cost of farming must be reduced. To this end, we strongly recommend a drastic reduction in import duties and GST on pesticides, ensuring farmers have access to high-quality, innovative products. While increased customs duties on pesticides might be beneficial for many, we believe this would be detrimental to farmers. We recommend the budget to focus on two key areas i.e. making innovative technologies accessible and reducing the cost burden on farmers. This requires minimising levies on farm inputs. Specifically, we propose reducing customs duties on intermediates required for manufacturing pesticides from 7.5 per cent to 2.5 per cent and reducing customs duties on pesticides from 10 per cent to 5 per cent” he said.
Supporting and expanding Production Linked Incentive (PLI) schemes for the agrochemical and fertilizer sectors will encourage domestic production and reduce reliance on imports, he said.
The Managing Director, Best Agrolife Ltd said “The 18 per cent GST on agrochemicals makes quality crop protection expensive for farmers. Reducing it to 5 per cent would make these products more accessible, boosting productivity and profitability. Additionally, India’s reliance on imports highlights the need for PLI benefits to encourage local manufacturing. The increasing pest resistance demands innovative solutions but at the same time the rising raw material costs are a major challenge for industry. To support this, the government could reintroduce the 200 per cent income tax deduction on investments in R&D and registration studies. The PLI scheme and research linked incentives would create an ecosystem that drives innovation and develops solutions tailored to India’s agricultural needs. The government can promote public-private partnerships to develop new crop protection molecules in India. These partnerships can help share the high discovery costs and boost domestic innovation. With institutional support, they can create a strong R&D ecosystem, reduce import dependence, and make India a leader in the global agrochemical market.”Top of Form
