5 Reasons Why Agrochemicals Dominate India’s Chemical Demand

The Indian chemical industry is diverse, encompassing pharmaceuticals, paints, textiles, and agrochemicals. Among these, agrochemicals form the backbone of domestic demand, supporting India’s agricultural sector and contributing significantly to the economy. Their role extends beyond farming, influencing rural livelihoods, exports, and food security.

Here are the top 5 reasons why agrochemicals dominate India’s chemical demand,

1. Growing Agricultural Needs
Valued at around USD 11.2 billion in FY 2025, & growing at approximately 8.7% year-on-year, the agrochemical sector is driven predominantly by the demand for fertilizers, pesticides, and crop protection chemicals to support modern farming techniques. Staple crops like rice, cotton, wheat, soybean, chillies, sugarcane, and gram constitute about 65% of domestic agrochemical consumption, anchoring steady demand. As farmers adopt modern techniques to improve yields and reduce losses from pests or disease, the need for agrochemicals continues to rise.

2. Contribution to Food Security
Agrochemicals help enhance crop productivity, ensuring a more stable food supply. Domestic consumption, supported by a stable rural agricultural base, accounts for about 49% of the market, with formulations for insecticides (41%), herbicides (22%), and fungicides (21%) dominating applications. With a growing population and increasing consumption, the chemical inputs provided by the agrochemical sector play a direct role in national food security.

3. Export Potential
India emerged as the 3rd largest agrochemical exporter in FY 2025 with exports valued at US$3.3 billion, nearly tripling from US$1.3 billion a decade earlier. Despite a shipment dip in FY24 due to global inventory destocking and competition, exports are rebounding in FY25, driven by cost-effective manufacturing and diversified export portfolios.

Herbicides form the fastest-growing export segment with a 20% CAGR from FY2020 to FY2025, increasing their share from 31% to 37% of total agrochemical exports, with key markets including the US, Brazil, and Japan.

Domestic production of crop protection chemicals, herbicides, and fertilisers caters not only to internal demand but also to export markets. This dual role strengthens the sector’s economic impact and positions India as a reliable global supplier.

4. Innovation and R&D
The agrochemical industry is increasingly investing in research and development. Innovations in bio-pesticides, seed treatment chemicals, and environmentally friendly fertilisers ensure better efficiency and sustainability. These developments give India a competitive edge over other chemical applications in terms of relevance and growth potential.

5. Supportive Policies and Industrial Ecosystem
Government initiatives, such as promoting chemical parks, incentivising production of crop protection chemicals, and supporting export-oriented growth, have strengthened the agrochemical sector. Compared to other chemical applications, agrochemicals benefit from a stable demand base, policy support, and integration with India’s broader agricultural development goals.

What lies in the future?
As agriculture modernises and adopts precision farming techniques, demand for advanced agrochemical products, the Indian agrochemical market is projected to grow at a CAGR of approximately 9% to reach USD 14.5 billion by 2028. Precision farming, bio-inputs, water-efficient formulations, and digitisation are expected to drive next-phase growth, while policy reforms such as subsidies favouring bio-inputs and incentives for advanced delivery systems will support industry expansion.