ACFI Proposes Rs 5,000-7,500 Crore Support Programme
NEW DELHI (Economy India): The government should introduce a Rs 5,000-7,500 crore support programme to help India become self-reliant in agrochemical technicals and intermediates and reduce its dependence on China, industry body Agro Chem Federation of India (ACFI) said in a report released on Sunday.
The report, prepared in collaboration with consultancy KPMG, proposed a seven-to-eight-year support programme aimed at strengthening domestic manufacturing and helping Indian producers overcome China’s cost advantage.
ACFI Proposes Seven-to-Eight-Year Support Programme
According to the report, the proposed programme should cover a period of seven to eight years, with the initial two to three years focused on plant commissioning, followed by sustained production support.
ACFI said such a framework would provide manufacturers with greater certainty to invest in new production capacity for agrochemical technicals and intermediates.
The industry body has argued that strengthening domestic production is important for reducing India’s exposure to overseas supply disruptions and building a more resilient crop protection chemicals ecosystem.
Incentives Proposed to Offset China’s Cost Advantage
The report has recommended a range of financial incentives to make domestic manufacturing more competitive.
ACFI has proposed an incentive of 5-8 per cent on incremental sales. It has also recommended 30-40 per cent subsidies on industrial electricity costs and shared effluent treatment plants.
According to the industry body, these measures would directly address some of the operating-cost advantages enjoyed by Chinese manufacturers.
Focus on Agrochemical Technicals and Intermediates
Agrochemical technicals and intermediates are essential inputs in the manufacture of crop protection products used by farmers.
ACFI’s proposal seeks to encourage investment across the domestic value chain rather than relying heavily on imported inputs.
The proposed support could help companies establish or expand manufacturing facilities and improve the availability of critical raw materials within India.
Strengthening Domestic Manufacturing
The industry body’s proposal comes amid efforts to strengthen domestic manufacturing capabilities across strategically important industrial sectors.
ACFI said sustained policy support would be required to make Indian production economically viable, particularly during the initial years when new plants are being established and production capacities are being scaled up.
The proposed seven-to-eight-year programme is therefore designed to combine capital and operational support, allowing manufacturers to move from plant commissioning to stable commercial production.
India’s Push for a More Resilient Crop Protection Supply Chain
Reducing dependence on a single overseas source for critical agrochemical inputs could strengthen the resilience of India’s crop protection supply chain.
ACFI’s recommendations focus on addressing cost competitiveness while encouraging investment in domestic production capacity.
The industry body has urged the government to consider the proposed Rs 5,000-7,500 crore programme as part of a broader strategy to build a competitive and self-reliant agrochemical manufacturing ecosystem in India.
(Economy India)
