Budget 2025: Crop protection industry seeks tax cuts, R&D incentives

CropLife India on Friday urged the government to reduce goods and services tax (GST) on agrochemicals to 12% and maintain a uniform 10% basic customs duty for technical raw materials and formulations in its upcoming Budget proposal.

The industry body also demanded a 200% weighted deduction on research and development (R&D) expenses for agrochemical companies and requested fund allocation to strengthen agricultural extension mechanisms.

"We request the government to create an ecosystem around a science-based, progressive, and predictive regulatory framework that will allow the sector to become globally competitive," the industry body said in a statement.

Key demands include: lowering GST from 18% to 12%, maintaining uniform 10% customs duty for both technical raw material and formulations, providing a 200% R&D expense deduction and extending R&D benefits to units with a minimum ₹50 crore fixed assets and ₹10 crore annual R&D spending.

The industry body warned that increasing customs duty to 30% would make crop protection products less affordable for smallholder farmers and restrict access to newer, greener formulations critical for addressing pest resistance and climate change challenges.