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Agrochemicals Market in India by 2025: India Can Emerge as an Alternative to China for Global Sourcing Hub for Agrochemicals

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  • October 2020
  • Region: China, Global, India
  • InfraInsights
  • ID: 5264397

Domestic Consumption of Pesticides in India is Worth US 2.77 Billion

Overview of Report:

The COVID-19 Pandemic has impacted almost every economy and every sector in the world but the agriculture sector in India has demonstrated phenomenal resilience and has largely remained unscathed. So much so that the economists are factoring the agriculture sector led the revival of the Indian economy. Most of the businesses are banking on a bumper harvest and high rural incomes to drive demand for goods after the coronavirus pandemic stunted growth in the country's urban pockets, where most of the factories and offices are located. A normal monsoon, record sowing of summer crops, improved winter harvest, and a raft of government measures are set to increase rural incomes to boost demand for goods ranging from two-wheelers to tractors. Among others that stand to benefit are consumer durables makers, farm input producers, cement firms, and essential goods manufacturers. Tractor sales, a bellwether for rural demand, have picked up strongly across rural belts and are headed for record growth.

The publisher is of the view that the crop protection chemicals sector that plays a vital role in increasing Agricultural Production in India is set for a steady growth trajectory as the farm sector gain momentum and also becomes the Government's go-to sector for resuming GDP growth. The sector is pivotal in two ways; protecting the crops and produce from pests and increasing Farm productivity.

Insecticides dominate the Indian Crop Protection market and form almost 53% of the domestic crop protection chemicals market, followed by Herbicides 24%, Fungicides 19%, and others 4%. A major application of pesticides in India is rice and cotton. Herbicides are emerging as the fastest-growing segment amongst agrochemicals. India with a cultivated land area of about 150 million hectares, currently ranks 2nd in the world in agricultural production with a value of $ 367 billion and 8th largest in agricultural produce exports with a value of $ 35 billion. As far as the Indian Pesticide Industry's concerned, India currently is the 4th largest global producer of Pesticides after the USA, Japan, and China. Domestic consumption of pesticides in India is worth US$ 2.77 billion while exports worth US$ 2.31 billion, a total market size worth US$ 5.08 billion. The exports by Indian companies' Generic segment producing a wide range of world-class formulations significantly contributed to the growth.

However, at 0.65 gm/ha, the average consumption of pesticides in India is very low compared to the global average of 3 kg/ha, the Agrochemicals sector in India has huge unrealized potential for growth, given the presently very low level of application as compared to global norms. As per industry estimates, yearly crop losses in India due to pests and diseases amount to 15 - 25% of the total output in the country. It necessitates the emphasis on crop protection chemicals particularly insecticides, fungicides, herbicides, and others like fumigants and rodenticides to protect the crop and after harvest produces in storage and transport.

With China Agrochemical Industry undergoing environmental protection rectification added with the prevailing US-China trade war, it provides an opportunity for the Indian agrochemical industry as an alternate global source point for agrochemicals. India has relatively advanced pesticide technical and formulation research capabilities. Currently, Indian manufacturing capacities are under-utilized. With more investment, it will be a great opportunity to increase its export business opportunities. The current US-China trade war also provides an opportunity to MNCs with a base in China to establish a manufacturing base in India and de-risk their future business growth strategies and vision plans, use advantages offered by the Indian Government's Make in India initiatives.

Key Questions Answered

  • What are the challenges faced by agrochemicals companies in India?
  • What is the capacity utilization of agrochemicals companies in India?
  • What is the opportunity available in the agrochemicals segment in India?
  • What was the market for agrochemicals in India in 2019-20 and how it has grown over the past 10 years?
  • What is the projected market for agrochemicals in India?
  • What is the M&A opportunity in the agrochemicals space in India?
  • What is the product portfolio of agrochemical companies in India?
  • Growth strategy adopted by leading agrochemical companies in India?
  • Is there a consolidation wave likely in the agrochemicals sector in India?
  • Which are the states where the agrochemicals sector is likely to show more growth compared to others?

Table of Contents

1. Executive Summary

2. Research Approach & Methodology

3. Agriculture sector in India

  • Arable land
  • Agriculture production in India
  • Growth in Agriculture sector in India
  • Contribution Agriculture to India's GDP
  • Agriculture exports & imports
  • Factors affecting agriculture productivity
  • Government initiatives to boost agriculture sector

4. Agrochemicals market landscape

  • Manufacturers
  • Manufacturing Capacity & Capacity Utilization
  • Key Agrochemicals used in India; insecticides, fungicides, herbicides, bio-pesticides
  • Competitive Landscape
  • Trade

5. Challenges for the agrochemicals market in India

  • High R&D costs
  • Genetically modified seeds
  • Lack of an efficient distribution system
  • Counterfeit products
  • Rise in demand for organic farming
  • Integrated pest system
  • Stringent regulatory oversights
  • Government farm subsidy

6. Growth drivers for the agrochemicals market in India

  • Export potential
  • Increase in usage
  • Product portfolio expansion
  • Growing demand for food grains
  • Many active ingredients going off patent

7. Market for Agrochemicals in India in 2020

  • By Product type
    • Insecticides
    • Fungicides
    • Herbicides

  • By application
    • Rice
    • Grains and Cereals
    • Oil Seeds
    • Fruits & Vegetables
    • Cotton

  • By Company
  • By Region
  • By Imports Vs Indigenous

8. Product Portfolio Analysis

9. Biopesticide Market in India

  • Usage in Crops
  • Key manufacturers of bio-pesticide
  • Statewise consumption of bio-pesticide
  • Market in 2019-20
  • Key growth drivers
  • Projected Market by 2025

10. Projected Market by 2025; Scenarios

  • By Product type
    • Insecticides
    • Fungicides
    • Herbicides

  • By application
    • Rice
    • Grains and Cereals
    • Oil Seeds
    • Fruits & Vegetables
    • Cotton

  • By Company
  • By Region
  • By Imports Vs Indigenous

11. Comparative analysis of the financial performance of agrochemical companies

12. M&A in the agrochemicals sector in India

  • Past; like Excel Crop Care & Sumitomo Chemical India
  • Projected

13. Growth strategy in the agrochemicals sector in India

  • Integrated Pest Management (IPM)
  • Precision Farming
  • Contract Farming
  • Patent Expiry of a Few agrochemicals products



Companies Mentioned

A selection of companies mentioned in this report includes:

  • Adama
  • BASF
  • Bayer
  • Biotech International Limited
  • Cheminova
  • Coromandal
  • Crystal
  • Dhanuka
  • Dupont
  • Excel Crop Care
  • Excel Crop Limited
  • Kilpest India Limited
  • PI Industries
  • PL Biologicals Limited
  • Prathibha Biotech Pvt Limited
  • Rallis India
  • Syngenta
  • UPL
  • Varsha Bioscience and Technology