Geopolitical Tensions and Rising China Prices May Push Agrochemical Costs Up by 5–10% in India: R.G. Agarwal, Dhanuka Agritech Ltd

Interview by Nimish Gangrade, Editor, Global Agriculture

13 March 2026, New Delhi: As India approaches the new sowing season, the agrochemical industry is closely watching global supply chains, rising raw material costs, and geopolitical developments that could influence product availability and pricing. The sector remains dependent on imports of key intermediates and technical materials, particularly from China, while global shipping routes are also under pressure due to ongoing geopolitical tensions.

At the same time, the industry is witnessing structural changes, including growing farmer awareness, increasing adoption of modern crop protection technologies, and a gradual shift toward safer and more sustainable chemistry. These trends are shaping the outlook for the crop protection market in India.

In this context, Nimish Gangrade, Editor of Global Agriculture, spoke with R.G. Agarwal, Chairman Emeritus of Dhanuka Agritech Ltd, to understand the industry’s preparedness for the upcoming sowing season, the impact of rising input costs from China, potential supply chain disruptions, and the likely price outlook for agrochemicals in India.

Outlook for the Upcoming Sowing Season

Nimish Gangrade: What is your outlook for the upcoming sowing season in terms of demand for agrochemicals across key crops and regions in India?

R.G. Agarwal: The outlook for the upcoming sowing season appears encouraging. Demand for agrochemicals in India continues to grow steadily as modern crop protection practices penetrate deeper into rural markets and areas where earlier access to such technologies was limited. With better farmer awareness and improved distribution reach, we expect the industry to maintain a growth trajectory of around 7–8% CAGR.

Another important trend is the increasing adoption of new-generation and green chemistry products, which are gradually replacing older molecules, including those categorized under the red triangle segment. Farmers are increasingly looking for solutions that are both effective and environmentally responsible. This shift toward advanced technologies will continue to drive the growth of the crop protection industry in the coming years.

Availability of Agrochemicals for the Season

Nimish Gangrade: Do you foresee any challenges in the availability of crop protection products during the upcoming season?

R.G. Agarwal: At present, the industry has built adequate inventories, and therefore we do not foresee any immediate shortage of crop protection products for the upcoming season. However, the evolving geopolitical situation in the Gulf region needs to be watched carefully.

If the conflict persists for an extended period, there could be some disruptions in global trade flows, including shipments of agrochemical inputs. Nevertheless, the industry today has multiple sourcing options, with alternatives available from regions such as the United States, Europe, and Japan. Hence, despite temporary uncertainties, we expect the supply situation to remain manageable and farmers should not face any significant difficulty in accessing crop protection products.

Import Dependence and Rising Prices from China

Nimish Gangrade: India’s agrochemical industry relies heavily on imported intermediates and technical-grade materials, particularly from China. How are rising prices from Chinese suppliers affecting the industry?

R.G. Agarwal: India’s agrochemical formulation industry continues to rely significantly on imported intermediates and technical-grade materials, particularly from China. Recently, we have witnessed an upward trend in prices from Chinese suppliers.

This increase is being driven by several factors, including the strengthening of the US dollar, rising energy costs, and higher raw material prices globally. Since a large portion of chemical intermediates are linked to crude oil derivatives, fluctuations in crude prices directly impact the cost of agrochemical production.

Consequently, procurement costs for intermediates and technical materials have been increasing, which may put some pressure on formulation costs for the industry.

Price Outlook for Agrochemicals

Nimish Gangrade: Given the current global environment, what price trends do you expect in the agrochemical market this season?

R.G. Agarwal: Given the current global environment, including higher raw material prices, logistics costs, and currency fluctuations, agrochemical prices may witness a moderate increase in the range of 5–10% during the season.

However, the impact will vary across products depending on their raw material composition and sourcing patterns. Much will also depend on how the geopolitical situation evolves and whether crude oil prices stabilize. If crude prices return to normal levels, the cost pressures on agrochemicals could gradually ease.

Supply Chain Disruptions and Industry Preparedness

Nimish Gangrade: With a large share of intermediates imported from China and global shipping routes facing disruptions, how is the industry managing supply chain risks?

R.G. Agarwal: Since a substantial share of intermediates and technical materials are imported from China, the industry has experienced some temporary disruptions, mainly in logistics and shipment timelines.

Currently, challenges such as container availability, shipping delays, and longer trade routes due to geopolitical risks are affecting global supply chains. These factors have led to some delays in shipments.

To mitigate these risks, companies are proactively building advance inventories and diversifying sourcing channels. In our case, a significant portion of our imports is sourced from Japan, and we remain confident about the reliability of supplies from there. While logistics may take slightly longer under the current circumstances, we do not anticipate any major disruption in product availability for farmers.

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