India's agrochemical exports are poised for a moderate rebound in Financial Year 2025, driven by improving demand and the normalization of global inventories, according to a recent industry report by Rubix. This positive outlook follows a sharp year-on-year decline of approximately 22% in FY24, a downturn attributed to global destocking and pricing pressures.

The Rubix report, an update to their May 2024 agrochemicals analysis, provides a snapshot of the industry, highlighting the dip in exports and the anticipated recovery. While exports faced headwinds in the recent past, the expectation is that they will rebound as global inventories stabilize and demand strengthens with better agricultural cycles. Indian manufacturers are also expected to adapt through cost-efficient production methods and diversified product portfolios.

Several factors contributed to the export decline in FY24. Global destocking, where companies reduced excess inventory, played a significant role. Additionally, pricing pressures and erratic weather patterns that negatively impacted agricultural activities in importing countries further dampened demand. The combined effect of these factors reduced India's trade surplus in agrochemicals from USD 3.6 billion in FY23 and USD 2.8 billion in FY24 to USD 2.3 billion in FY25 (from April 2024 to February 2025).

Despite these challenges, the report forecasts an 8.7% year-on-year growth for the Indian agrochemical industry in FY25. This growth is projected to continue, with an anticipated CAGR of 9% between FY25 and FY28, leading to an industry size of USD 14.5 billion by FY28. The export CAGR from FY20 to FY25 is estimated at 3%, matching the import CAGR for the same period.

The United States and Brazil have consistently been the top export destinations for Indian insecticides and fungicides over the past five years. However, FY25 saw a shift in herbicide exports, with Japan surpassing Brazil to become the second-largest destination. Herbicides have emerged as the leading export segment, experiencing the fastest growth at a 20% CAGR from FY20 to FY25. Consequently, the share of herbicides in total agrochemical exports has increased from 31% to 37% during this period.

These figures are based on the latest available data from the Department of Commerce, Ministry of Commerce and Industry, Government of India, and Rubix analysis. The analysis considers various HS codes, including 380891 (insecticides), 380892 (fungicides), 380893 (herbicides), 380869 and 380899 (other types), and 380894 (disinfectants).