New Delhi, Jan 29: ACFI is looking to the upcoming Union Budget to extend the policy momentum built over the past decade for betterment of Indian Farmers and agriculture by announcing more measures including halving the import duty on pesticides to 5 per cent.
In a representation to the government, Agro Chem Federation of India also made a strong case for rationalisation of GST on crop protection chemicals.
ACFI said the present government is continuously working towards the empowerment/ betterment of Indian Farmers and is supporting agriculture and farmers through various schemes, and subsidies.
The representation seeks more measures from the government to further help Indian farmers cultivate more cost-effectively.
While emphasising that farmers invest significant money in seeds, fertilisers, water, labour, etc., for farming, ACFI said pesticides serve as insurance that protects their crops.
Indian farmers need newer molecules for this purpose: the changing cropping patterns and agroclimatic conditions make it essential that farmers are provided with a broader range of cost-effective products.
“We suggest reducing the import duty from 10 per cent to 5 per cent to ensure that farmers receive the full benefit of newer, better technology. We believe that the decision should be made in the context of India’s overall agricultural strategy,”
Dr Kalyan Goswami, Director General, Agro Chem Federation of India.
“We should ensure that the highest-quality agri-inputs are made available to farmers at the best prices,” said Dr Goswami.
ACFI further said that the Government’s sustained efforts towards “farmer empowerment”, ranging from targeted subsidies and input support to credit reforms, digital infrastructure and marketing interventions, have created a progressive framework for agriculture.
Simultaneously, the 2025 GST reforms, by simplifying compliance, strengthening ITC mechanisms, and proactively reducing litigation, reflect a commitment to making GST a truly farmer- and taxpayer-friendly system.
Against this backdrop of reforms, ACFI has highlighted the critical incongruity in the taxation of agricultural inputs.
While fertilisers are rightfully taxed at a concessional GST rate of 5 per cent, pesticides continue to attract an 18 per cent GST rate, significantly raising the cost of cultivation for farmers.
Over 85 per cent of Indian farmers are small and marginal, with landholdings of less than 2 acres, and already face severe financial constraints and limited access to subsidy benefits.
Dr Goswami said that the higher GST burden on pesticides directly translates into increased cultivation costs, reduced affordability of vital crop protection solutions, and a risk of lower adoption, ultimately compromising productivity and food security.
Given that pesticides and fertilisers are complementary and essential inputs, both critical for ensuring yield security and farmer income, maintaining two separate and unequal GST slabs creates policy inconsistency. It undermines the principle of neutrality embedded in the GST framework.
“In alignment with the 2025 GST reforms’ objective of rationalisation and fairness, we humbly submit that the GST on pesticides may kindly be reduced to 0 per cent (exempt) as an essential agricultural input, or at least aligned with fertilisers at 5 per cent GST, ensuring parity across essential farm inputs,”
Dr Kalyan Goswami.
Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget on February 01, 2026 in the Lok Sabha.