India’s Agrochemical Sector: Promising Opportunities

The Indian agrochemical sector was valued at 13 bln EUR in FY’23 and is projected to grow at a Compound Annual Growth Rate (CAGR) of 9% from FY’25 to FY’28. The industry is currently driven by government support and a growing domestic and export market.

Steady growth in agrochemical exports has made India the second largest exporter, with exports valued at 5 bln EUR in FY’23. India exports to more than 140 countries, including the USA, Brazil, Japan, China, and Vietnam, which are the top five export destinations. These countries account for 65% of India’s total exports.

The herbicide segment is a key driver of growth in the agrochemical sector. Approximately 20% of agricultural production is lost due to pests each year, leading to the use of herbicides, which account for around 35% of the total crop production cost in India. Additionally, continuous investments are being made in the development of new, more effective, and eco-friendly herbicide formulations.

Given India's agrarian nature, the Government of India, according to the Federation of Indian Chambers of Commerce and Industry (FICCI), has identified the agrochemical sector as one of the top 12 priority sectors. As a result, the government is planning to implement a Production Linked Incentive (PLI) scheme specifically for this sector, offering financial incentives ranging from 10% to 20% to companies that manufacture certain high-value agrochemicals in India. This scheme can significantly offset initial investment costs and enhance the attractiveness of domestic production.

In retrospect, the Indian agrochemical sector presents a unique blend of robust domestic growth potential, supportive government policies, and a lucrative export opportunity. By partnering with our experienced team, companies can seize this exciting opportunity and achieve sustainable success in the Indian market.

EAC International Consulting has a proven track record of supporting clients in the chemicals market with a dedicated chemical team. The PLI scheme, in general, in India has been a hit and a miss. If you are not sure whether the anticipated new scheme would be valuable, contact us. Our reach from the policymakers to the industry makes us the perfect partner for anticipating and mitigating issues most likely to plague foreign investors. In fact, many of our customers are currently enjoying privileged support from government policies and are pushing a gap between them and their competitors.

Your next big challenge once you decide to tap into the Indian market would be the identification of the correct partner, whether as a supplier or as distributor or others. The abundance of seemingly suitable options is almost always a death trap for organizations and in such cases, they prefer to utilize EAC's expertise and network, most recently a rubber chemical company and a pigment manufacturer.

To learn more about how EAC can help your business succeed in the Indian chemical market, please connect with our team of experts: Rajesh Raut and Sahil Shridhar . We look forward to engaging with you.