Published on November 30, 2013

Agriculture as we all know forms the backbone of the Indian economy. Ensuring food security for millions of Indians has been made possible only because of significant contributions from the Indian chemical industry. Modern farming techniques fuelled by usage of fertilizers, judicious use of pesticides and high yielding varieties of seeds has enabled Indian agriculture to meet food needs of an ever increasing population. The pesticides industry- a vital segment of the Indian chemical industry has contributed significantly to India’s agriculture. This industry generates employment for nearly 60,000 people and expects to increase employment to the extent of 7 per cent by the end of the XIIth Five Year Plan period.

The Indian pesticides industry stands at $3.8 billion and is expected to grow at the rate of 12-13 per cent per year to $7.7 billion by the end of the XIIth Five Year Plan period. India is a major exporter of pesticides to USA, France, Netherlands, Belgium, Spain, South Africa, Bangladesh, Malaysia and Singapore. India is the 4th largest producer of pesticides after U.S, Japan and China. The Indian pesticides industry boasts of about 125 technical grade pesticides manufacturers and 800 pesticides formulators. The global pesticides industry stands at $45 billion. Key pesticides markets are located in USA, France, The Netherlands, South Africa and Bangladesh.

The Indian pesticides industry is currently plagued by over-capacity, reduced capacity utilization, inadequate investments in R&D and untenable production levels. The industry suffers from high inventory and irregular demand. Also, consumption of pesticides in our country is low in comparison to other countries.

The pesticides segment has certain advantages when compared to other segments of the chemical industry. For instance, irregular demand for pesticides in India has resulted in a high inventory. This excess production capacity can be used to increase exports. Consumption of pesticides is lower in India compared to countries. However, the rising population and the need to achieve food grain self-sufficiency will lead to increased growth rate for the pesticides industry. Domestic production of pesticides is possible at reduced rates thereby enabling Indian producers to offer pesticides at the cheapest price available in the world. Another factor that can trigger the growth of this industry is that the scope of bringing new areas under cultivation is highly limited. Available agriculture land per capita has also been reduced globally. Thus the pressure to increase yield per hectare will lead to increased use of pesticides.

Increasing awareness among farmers about the right use of pesticides in terms of quantity and application method will encourage increased utilization of pesticides. Growing industries of horticulture and floriculture will also improve demand for pesticides.

Developing products that are both user and environment friendly will do wonders for the industry. This can be possible only with improved R&D efforts. Increased R&D expenditure will enable Indian companies to not only offer high quality products but also meet competition from the global market.

However, certain obstacles can hamper the industry’s efforts to develop. Majority of the Indian industries suffer due to poor infrastructure and lack of policies that would initiate the process of establishing better infrastructural facilities. High cost of power and finance in India is hindering the growth of this industry. The labour law in our country does not allow any flexibility in the deployment of labour, which ultimately leads to a stagnant industry.

The industry is plagued by complex product development processes and lack of government cooperation in improving quality control has only made matters worse.

Increasing environmental awareness has given to a rise in demand for organic farming and use of bio-pesticides. The industry should address concerns on negative impact of pesticide usage.

High R&D costs, counterfeit products and threat from Genetically Modified (GM) seeds are a few other challenges that the industry faces.

The growth target that the industry has set for itself cannot be achieved without help from the government. For instance, the product registration process often gets delayed which in turn leads to delay in exports. The government should ensure that the process gets simplified and efficient. The government should also help speed up the environmental clearance process.

The industry needs to work with the government to increase awareness among farmers regarding the right and judicious use of pesticides. There is a need to prevent counterfeit products from reaching end-users. The presence of fake pesticides in the market is a major problem which can be prevented through joint efforts by the government and the industry.

The pesticides industry is in need of more support and investment. The industry is in dire need of budgetary support and increased investment in R&D.