Agro chemical companies oppose proposed increase in customs duty on pesticide formulations as it will hit farmers hard

 CropLife India, an association of 15  research and development driven crop science companies in the country have expressed concern at recent proposed move  of the government  to double Custom Duty on agrochemical formulations to 20%. This would severely hurt the interests of the farmers of the country, in terms of increasing cost of farming and non-availability of the newer innovative products.

It is clear that the idea of ‘doubling’ custom duty is being proposed based on ‘misleading information’; in the last couple of months, about the “huge” formulation imports in the country. However, the actual data of import proves otherwise.  

Mr. Asitava Sen, Chief Executive Officer, CropLife India said, “The idea is ill-conceived and not based on ground realities. Imported pesticide Formulations constitute INR 1800 crores, which is hardly 20% of total agrochemicals imported in India. The proposal to enhance custom duty on formulated products will set to reduce ‘Ease Of Doing Business’, highlight uncertainty of Indian policies and send out wrong signals to investors in this sector; apart from not achieving either any significant financial benefit for the exchequer or increasing local manufacturing; while hurting the farmers’ interest”.  

Mr. Sen added, “While our association fully supports ‘Make in India’, it should not come at the expense of our nation’s farmers to compete globally. The products being imported are not being manufactured in India, anyways. Once these solutions get adopted by the farmers, local manufacturing commences for long term objective which supports ‘Make in India’.”

Pesticides are like medicines for agricultural crops, and protect them from the ravages of pests’ diseases and weeds (crop losses to pests presently is pegged at 15-20%). Farmers invest huge sums by way of seeds, fertilizers, water, labour etc. to undertake farming, and pesticides act as an insurance that protect their crops and investments. Indian farmers need newer molecules for this purpose: the changing cropping patterns, climate change, invasion by invasive pests and extremely narrow existing product portfolio makes it essential that farmers are provided with a bigger and better range of products.

Almost all pesticides formulations that are being imported are based on newer, safer and better chemistries; and provide farmers’ with a whole new range of products for fighting the newer challenges posed by pests and diseases. As such imported formulations largely pertain to new molecules that lend better sustainability, pesticides’ resistance management, environmental fate and safety to the users. Taxing them at higher rates will discourage introduction of newer chemistries, leading to loss of viable newer options at the hands of the farmers.

CropLife India strongly urge the government not to differentiate formulations from the active grade pesticides for the purpose of levying custom duty.

About CropLife India:           

CropLife India is committed to advancing sustainable agriculture and it is an association of 15 R&D driven member companies in crop protection. We jointly represent ~ 70% of the market and are responsible for 95% of the molecules introduced in the country. Our member companies have annual global R & D spend of 6 billion USD and are firmly committed to engaging with the farming community to enable Safe, Secure Food Supply.