Crisil: Indian Agrochemical Industry Set for Recovery as Exports Rebound
The Indian agrochemical industry is projected to grow 6-7% this fiscal, driven by a rebound in exports due to improved global demand and normalized inventories, according to Crisil. This recovery follows a two-year downturn. While domestic demand faces headwinds from a protracted monsoon, the industry's ability to return to its long-term growth range of 8-10% next fiscal hinges on sustained export momentum and a robust domestic demand recovery.
Crisil forecasts a significant turnaround for the Indian agrochemical industry, projecting a revenue growth of 6-7% for the current fiscal year. This optimistic outlook is primarily attributed to a strong resurgence in exports, marking a recovery after a challenging two-year period. The rebound in export volumes is fueled by improved global demand for agrochemical products and the normalization of inventory levels across international markets, which had previously weighed down the sector. However, the domestic market presents a contrasting picture, experiencing a slowdown in offtake due to an extended monsoon season, which has impacted agricultural activities and demand within India. Looking ahead, Crisil emphasizes that the industry's return to its historical long-term growth trajectory of 8-10% in the next fiscal year is conditional. Achieving this higher growth rate will depend critically on the sustained momentum of its export performance and a robust recovery in domestic demand, alleviating the current pressures from weather-related disruptions. The report underscores the dual dynamics shaping the sector's performance: a strong international recovery balanced against domestic challenges.
