Government should drop GST from 18% to 6%, implement a PLI system on agrochemicals Industry
According to Vimal Alawadhi, the managing director of Delhi-based Best Agrolife, the government should implement a production-linked incentive (PLI) system for the agrochemical business, as it does for many other sectors.
‘We need an appealing PLI plan, as well as simplicity of transportation with fewer intermediates inside the country,’ Alawadhi said in a statement. He believes that not just the strategy, but also its effective implementation, would be critical to the industry in the coming year.
‘We hope the government comes out with reforms to rationalize GST on agrochemicals — drop from 18% to 6%, he added of Budget predictions. This will contribute to the goal of tripling farmer income. We would also like to see import levies on finished goods raised in order to make local producers more competitive.’
Currently, the government imposes a 10% tariff on pesticide imports. The urgent need is to make Indian products globally competitive and to provide attractive incentives to export-oriented enterprises. According to Alawadhi, the government should provide financial and technical assistance to Indian manufacturers for backward integration, particularly for import substitution intermediates, to enable the industry to become a more combative rival to China.
According to industry estimates, the agrochemicals market would likely reach ₹80,000 crores by 2026, up from the present ₹50,000 crores. The export proportion is also expected to rise to 60% by 2026, up from 50% currently.