ACFI urges Fin Min to reduce import duty and GST on crop protection chemicals

New Delhi

The Agro Chem Federation of India (ACFI) has urged Finance Minister Nirmala Sitharaman to reduce import duty on crop protection chemicals in the forthcoming Union Budget 2023-24. Besides, it has also urged the Minister to provide fiscal incentives to private players for undertaking research and development in association with Krishi Vigyan Kendras (KVKs).

Sitharaman will be presenting the Union Budget in the Lok Sabha on February 1.

Observing that India has not invented any new crop protection chemical molecules in recent years because the cost of discovery to commercialization is around $280mn spread over 10 years, Parikshit Mundhra, Chairman, ACFI, said that adequate incentives are needed to promote the domestic industry.

"India presently has no choice but to import to ensure that Indian farmers are not deprived of new technological crop protection solutions," he said.

Mundhra urged the Union Finance Minister to reduce import duty on crop protection chemicals in her forthcoming Budget and also extend data protection to new molecules registered in India so that farmers could avail the latest technology and molecules at a competitive cost.

ACFI has informed that the Department of Chemicals has shortlisted 40 molecules under the Production-Linked Incentive (PLI) scheme till date. These include seven crop protection chemical intermediates.

"This is going to definitely boost Make in India initiative but there is also a need to include more crop protection chemicals and intermediates in the PLI Scheme," Mundhra said.

He said the ACFI expects that some announcement regarding the extension of the PLI Scheme to more crop protection chemical intermediates will be made in the Budget.

RG Agarwal, Chairman, Dhanuka Group, said in a comment: “Government has been promoting the usage of technology in the agriculture sector in a big over the last few years. Needless to say, the adoption of precision farming and sustainable agriculture practices will go a long way in enhancing crop yield, lowering cost and improving soil conditions. The adoption and implementation of the best practices need to be sped up and towards this end, it would be imperative for the Government to provide some fiscal incentive to farmers, which will encourage them to embrace technology.”

The Federation also expects the Finance Minister to provide fiscal incentives to private sector players to undertake research and development in the agriculture sector in association with KVKs.

The KVK scheme is 100 per cent financed by the Government of India. The mandate of KVK is technology assessment and demonstration for its application and capacity development.

ACFI wants the government to bring down the Goods and Services Tax (GST) on crop protection chemicals to 5 per cent as in the case of fertilizers. The Federation said that the current GST of 18 per cent on the chemicals is not in the interest of small and marginal farmers as they have to shell out more money to purchase the crop protection chemicals. Secondly, when fertilizers and crop protection chemicals are in the same category, having different slabs of GST applicability is meaningless.