Levy of Customs tariff be raised to 30% on Readymade Pesticide Imports
The Pesticides Manufacturers & Formulators Association of India (PMFAI) notes that the current customs duty structure, levying an equal amount on the import of technical grade pesticides and finished pesticide formulations can potentially wipe out the pesticide industry in India and must be increased to 30 percent on imports of finished pesticides formulations from the current 10 percent for the success of ‘Atmanirbhar Bharat’. It also notes that custom duty on imports of technical grade products should be hiked to 20 percent.
Before the economic liberalization in 1991, the government levied a customs duty of 40 percent on intermediates and raw material and technical grade pesticides used for manufacturing of formulations. This led to faster development of the Indian agrochemical industry as many large, medium, and small-scale industries manufacturing technical grade pesticides and pesticide formulations in the country were set up. Since liberalisation, customs duty on pesticide was reduced from time to time and in 2007, import duties on technical grade pesticide and finished formulation were brought at par.
“There are a lot of anomalies in the current customs duty regime that favours the imports of pesticides rather than manufacturing in India. This gives an unfair advantage to MNCs and importers and defeats the vision of ‘Atmanirbhar Bharat’. Same customs duty for import of technical grade products and finished pesticide formulation products promote imports of finished goods and is a death knell to the Indian agrochemical manufacturing industry, which is the 4thlargest global producer of agrochemicals or pesticides after the US, Japan, and China. The government must amend the current structure of customs duty and increase them to 30 percent and 20 percent for imports of finished pesticide formulations and technical grade products, respectively,” says Mr. Pradip Dave, President, PMFAI.
PMFAI, an industry body comprising more than 200 small, medium, and large-scale Indian pesticide manufacturers, formulators, and traders, also note that the current structure of customs duty can wipe out the Rs. 43,000 crore industry and may leave Indian farmers at the mercy of the importers and MNCs.
“Indian Pesticide Industry size at present isRs.43, 000 crores including exports worth Rs.23,000 crores pesticides and domestic consumption worth Rs.20,000 crores. The low customs duty favour importing from overseas countries and especially from China that worked out as easier and cheaper. But it has caused a downward trend in the manufacturing sector in India with no new plants being set up recently. Besides, investments in industries manufacturing key intermediates and raw material have dropped, leading to dependence on imports of Manufacturing Use Products (MUPs) such as intermediates and raw material. Unless we urgently reverse the setback, particularly to the MSMEs, it will harm the industry and the farmers – the MNCs and companies associated with them, who import ready-to-use pesticide formulations to the country without registering technical grade products here, sell them to farmers at a profit margin ranging from 100 to 200 percent. The customs duty on imports of technical grade pesticides (active ingredients) must be increased to encourage and support its indigenous production,” says Mr. Dave.
Pesticides Manufacturers & Formulators Association of India (PMFAI) is a national level industry Association representing Agrochemical (Pesticide) Industry with more than 200 small, medium and large-scale companies as its members. PMFAI came into existence in the year 1967 with a view to provide platform for Indian Pesticide Industry and represent their problems at Central and State Government levels. From its inception in 1967, PMFAI represent the interests of Indian Agrochemical Industry and Generic Pesticide producers in India.
PMFAI plays an important role in promoting quality Generic pesticide molecules which are made available to Farmers at the most economical prices comparing the prices of imported molecules.
PMFAI works to enhance Indian Agriculture competitiveness by promoting improvement and innovation in technologies of pesticide formulation to provide Indian farmers with quality crop protection molecules. PMFAI’s key activity includes educating farmers on safe and judicious use of agrochemicals, promoting exports of agrochemicals from India amongst various other activities. Under CSR activity PMFAI also sponsors education for farmers’ children, safety kits (PPE) distribution to farmers.
Through its prestigious event “International Crop Science Conference & Exhibition (ICSCE)”, PMFAI promotes Export of Agrochemicals from India.
PMFAI has played a key role in increasing Indian Pesticides exports and introducing Indian companies to world markets through its event ICSCE. When PMFAI organized its first event in 1997 exports of agrochemicals from India was hardly Rs.270 crores which now has reached to Rs.23, 000 crores. PMFAI has thus played a key role in increasing Indian Agrochemical exports.