India's Agrochemical Exports Set for Rebound: Inventory Stabilisation and Rising Demand Boosts Outlook

India's agrochemical exports are anticipated to moderately recover in the financial year 2025, driven by an improvement in demand and inventory stabilisation, as revealed by a report from industry analyst Rubix. The sector faced a steep decline of 22% in 2024 due to global inventory destocking, aggressive pricing from China, and low demand in major markets.

The report highlights that distributors worldwide scaled back procurement to tackle excessive stock levels amidst decreasing prices. Concurrently, Chinese vendors re-entered the market with competitively priced goods, impacting the competitiveness of Indian exports. Adding to the challenge, erratic weather conditions in importing countries further suppressed demand.

Prospects for a rebound are evident as global inventories stabilize and demand rises with better agricultural cycles. Indian manufacturers are poised to adapt by optimizing production costs and diversifying portfolios. The trade surplus narrowed from USD 3.6 billion in FY2023 to USD 2.3 billion in FY2025, reflecting the evolving landscape.

The report underscores a significant rise in herbicide exports, growing at a 20% CAGR from FY2020 to FY2025, with its share in total agrochemical exports climbing from 31% to 37%. This growth is attributed to India's cost-effective production and the increased global demand for affordable herbicides amid rising labor costs for traditional farming methods.

Moreover, export patterns show a concentration in key markets, with the top five destinations holding over half the market share for insecticides and fungicides and nearly 71% for herbicides. The United States and Brazil continue to be leading buyers of Indian agrochemicals, with Japan overtaking Brazil as the second-largest market for herbicides in FY2025.

(With inputs from agencies.)