AGROCHEMICALS
Rasayan . It has also acquired another eight-hectare site for backward integration into raw materials . Japanese agrochemical innovators in general have been taking the lead in seeking a presence in India . Indeed , almost all of them are present in India now through joint ventures , investments or acquisition . These include :
• Bharat Certis , a venture between Mitsui , Nippon Soda and Bharat Insecticides , which will soon be launching patented formulations in the Indian market
• IFFCO-MC , a joint venture of Mitsubishi and IFFCO to distribute fertilisers in India
• Summit Mahindra , a joint venture between Sumitomo Corporation ’ s Summit Industries subsidiary and Mahindra for the Indian market
• Sumitomo Chemical India , which was formed by Excel and Sumitomo Chemical They are not alone , however . For instance , US firm Albaugh recently started Indian operations , while Gowan , also of the US , will soon have its range of products distributed directly in India . Even Rainbow , a Chinese company , has registrations in India market and has started operations there . India is already a big producer of technical-grade pesticides and formulations , ranking at number four in the world behind the US , Japan and China . Total production of agrochemicals was around $ 6 billion in 2019 . Exports in India accounted for 53 %; Brazil and the US were comfortably the biggest export markets . India has a number of important advantages in the production of pesticides and intermediates . Skilled and unskilled manpower , as well as a wide range of raw materials , are all easily available . Labour costs are low , the patent protection system is strong and India ’ s many excellent chemists and other scientists have considerable technical expertise in handling various reactions and registrations .
Scope for improvement
The Indian government has given support to the chemical industry through the Production Link Incentive ( PLI ) scheme , which gives emerging industries incentives to add capacity . The wider objectives of this scheme are to :
• Increase the manufacturing sector ’ s growth rate to 12-14 %/ year
• Create 100 million additional manufacturing jobs by 2022
• Ensure that the manufacturing sector ’ s contribution to GDP is increased to 25 %, with the aim of making India a $ 5 trillion economy by 2025
The COVID-19 pandemic meant that the latter two targets now appear to have been too ambitious but the direction of travel is clear . Vast opportunities are still available . There is certainly huge scope for expansion in the penetration of pesticides in India , despite the formidable challenges faced ( Figure 1 ). In particular , the ecosystem of HSE compliance in India is weak . Outside the top ten or so agrochemical producers , there are few agrochemical producers who can really qualify the requirements of multinationals in this respect . High set-up costs for new facilities , the time required and the opportunity loss due to such delays are key areas of concern . Currently , pesticide usage in India is 0.5 kg / hectare on a cultivated area of around 195 million hectares , a total of 61,000 tonnes in 2020 . This is very low compared to almost every other major market ( Figure 2 ). At present only 25- 30 % of the cultivated area in India uses crop protection products . India is a huge market in its own right , with a need to increase food output to feed a still growing population of over 1 billion people . The increased – and more judicious - uses of pesticides will necessarily form part of that . The Indian government is also helping here by offering farmers credit at low interest rates in order to help them buy seeds and pesticides to increase yield . •
Kg / hectare
Sanjay Gupta
AVP – INTERNATIONAL BUSINESS
BHARAT RAYASAN LTD . k + 91 11 4366 1106 J sanjaygupta @ bharatgroup . co . in j www . bharatgroup . co . in
Figure 2 – Pesticide consumption in major markets
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