Budget 2023: Agro-chem industry reduced GST, import duty on crop protection chemicals

Budget 2023: Agro-chem industry reduced GST, import duty on crop protection chemicals

In the next Union Budget 2023-2024, 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 firms for engaging in R&D.

Parikshit Mundhra, Chairman of ACFI, stated in a statement that sufficient incentives are required to support the local industry. He noted that India has not developed any novel crop protection chemical compounds in recent years due to the cost being relatively expensive. In the announcement on Monday, he stated that "India currently has no choice but to import to ensure that Indian farmers are not deprived of modern technical crop protection solutions." Additionally, it requested the government to reduce the GST on fertilisers and crop protection chemicals to 5% each.

The federation said that the current GST of 18 per cent on chemicals is not in the interest of small and marginal farmers as they have to shell out more money to purchase crop protection chemicals. The industry body said the Department of Chemicals has shortlisted 40 molecules under the PLI scheme till the day, which includes seven crop protection chemical intermediates.

As part of its Atmanirbhar plan, the Government launched Production Linked Incentive (PLI) schemes in varied sectors to make Indian manufacturers globally competitive, attract investments, enhance exports, integrate India into the global supply chain and reduce dependency on imports.

ACFI now expects that some announcement regarding the extension of the PLI Scheme to more crop protection chemical intermediates will be made in the Budget. The government is in the process of finalising the Budget document to be presented on February 1.

On October 10, the formal process to create the annual Budget for the following fiscal year (2023–24) got under way. Given that the next Lok Sabha elections are scheduled for April or May of 2024, Budget 2023 is most likely to be the last complete budget of the Modi government during its second term.