3 Transformative Factors of Indian Agrochem Market

India’s agrochemical industry has consistently clocked a double-digit CAGR of 16 per cent over the last five years against the global CAGR of 3 per cent.

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2022 was a fruitful year too, clipping a 23 percent growth, despite the hot summer and delayed monsoons. Factors such as increased crop production, healthy reservoir levels and an improvement in farm income all contributed to industry growth. With farmers learning more about improving their yields exponentially through agrochemicals, the market is set to continue its double-digit growth into 2023. Research firm Crisil predicts a growth rate of 15-17 percent this year, as the sector is poised to solve two behemoth challenges – food and nutritional security to alleviate hunger and restoration of ecological balance in our lands. Let’s look at some of the factors sustaining the momentum.

Supply chain disruptions 

The import/export game is changing tides in the sector. The Chinese government’s environmental clampdown has led to the closure of approximately 35 percent small agrochemical manufacturing industries. When coupled with the US-China trade war, countries are adopting a ‘de-risk China’ strategy where India emerges as an alternate and viable global sourcing point for agrochemicals. We can expect exports to remain one of the key contributors with a share of over 50 percent in the industry’s total revenue in 2023.

Roll out of new crops