Tax Reform Call: Boosting India's Agrochemical Sector

CropLife India appeals to the government to lower GST on agrochemicals, maintain uniform customs duties, and enhance R&D tax deductions in the Budget. These measures aim to make the agrochemical sector globally competitive by reducing costs for farmers and promoting greener, innovative solutions.

In a bid to enhance the competitiveness of India's agrochemical sector, CropLife India has urged the government to implement significant tax reforms in the upcoming Budget. The industry association calls for a reduction in the GST rate on agrochemicals from 18% to 12% and maintaining a consistent 10% basic customs duty on technical raw materials and formulations.

Further, CropLife India advocates for a 200% weighted deduction on research and development expenditures and the allocation of funds to strengthen agricultural extension mechanisms. The group warned that any rise in customs duty, potentially up to 30%, would negatively impact smallholder farmers by making crop protection products more costly and obstructing access to innovative, eco-friendly solutions necessary for combating pest resistance and climate change.

The industry group's demands include extending R&D benefits to companies with a minimum of Rs 50 crore in fixed assets and R&D expenses of Rs 10 crore annually. These measures, they argue, will foster a science-based regulatory environment, positioning the sector for global competitiveness.

(With inputs from agencies.)