The Indian agriculture sector remains the backbone of the nation’s economy, accounting for about 15 percent of the country's GDP. Nearly 60 percent of rural households rely on agriculture as their principal means of livelihood. To support continued growth, the agrochemical industry sector is developing strategies to leverage opportunities involving insecticides and fungicides, new labor-saving herbicides, more products moving off-patent, and innovations in agrochemical solutions.
Chemical companies should take note of the following opportunities for the Indian agrochemical industry:
Contract manufacturing and exports of pesticides: India is the thirteenth largest exporter of pesticides.1 Key growth drivers include India’s capability in low cost manufacturing, the availability of technically trained resources, seasonal domestic demand, overcapacity, better price realization globally, and a strong presence in generic pesticide manufacturing.
Off-patent products: Agrochemicals worth USD 4.1 billion are expected to go off-patent by 2020.2 This provides significant export opportunities for Indian companies which have expertise in manufacturing generic products.
Growth in herbicides and fungicides: In the past, the availability of cheap labor for manual weed picking has limited growth for herbicides. But today’s labor shortages, rising labor costs and new genetically modified crops have increased use of herbicides with an increase of 15 percent per year over the next five years. Growth in fungicides has grown by 7.5 percent over the last five years, and this growth is expected to continue.
Low consumption of pesticides in India: The per hectare consumption of pesticides in India is amongst the lowest in the world — 0.6 kg/ha compared to 13 kg/ha in China.3 Usage is bound to increase to help boost yields.
Innovations in agrochemistry: The current labor shortage is accelerating the introduction of slow release or controlled release type of formulations which avoid multiple sprays. Farmers are also investing more in seed treatment agrochemicals that help ensure disease resistance along with better and more uniform germination.
In many ways, the Indian agrochemical industry represents both the challenges and opportunities of today’s emerging markets. Backed by government policies such as Make in India and tax reform measures such as the Goods and Services Tax (GST), crop protection and crop enhancement solutions are being developed based on best global practices and the latest technologies. Properly designed and executed, current initiatives can help India become a global manufacturing hub of quality crop protection chemicals.