Budget 2023-24: ACFI Urges Finance Minister to Cut Import Duty & GST on Crop Protection Chemicals

In the upcoming Union Budget 2023–24, the Agro Chem Federation of India (ACFI) has urged Finance Minister Nirmala Sitharaman to lower import taxes on crop protection chemicals and offer financial incentives to private businesses working with Krishi Vigyan Kendras (KVKs) on research and development.

Finance Minister Nirmala Sitharaman will be presenting the Union Budget on February 1 in the parliament.

Parikshit Mundhra, chairman of ACFI, noted that India has not developed any new crop protection chemical molecules in recent years due to the cost of discovery to commercialization being approximately USD 280 million spread over 10 years. He added that sufficient incentives are required to support the domestic industry.

In order to ensure that Indian farmers have access to cutting-edge technology crop protection solutions, India now has no choice except to import, he added.

For farmers to access the most recent technology and molecules at a reasonable price, Mundhra requested the finance minister to lower import duties on crop protection chemicals in the upcoming Budget as well as to extend data protection to novel molecules registered in India.

According to ACFI, the Department of Chemical has identified 40 compounds for the PLI scheme's short list as of today, including 7 intermediates for crop protection chemicals.

The Make in India programme will undoubtedly benefit from this, but the PLI Scheme also needs to include more crop protection chemicals and intermediates, Mundhra stated.

According to him, the ACFI anticipates that the PLI Scheme will be expanded to include more intermediates of crop protection chemicals in the Budget.

The Federation also anticipates that the finance minister will offer financial incentives to private sector participants so they will collaborate with KVKs on agricultural research and development.

ACFI is requesting that the GST on crop protection chemicals be reduced to 5 per cent, just like it is for fertilizers. According to the Federation, the present GST rate of 18 per cent on chemicals is not in the small and marginal farmers' best interests because it forces them to pay more for crop protection chemicals. Second, even though fertilizer and crop protection chemicals fall within the same category, the difference in GST applicability slabs has no practical significance.

For the unversed, the Indian government is responsible for funding the KVK scheme entirely. Technology assessment and demonstration for application and capacity development are part of KVK's mandate.