Under its “Make in India” initiative, Modi – government is pulling all stops to give a boost to indigenous industry even if it means cutting down on imports. While, use of WTO compatible measures such as increasing import duty is welcome, it would raise many eyebrows if the government starts giving orders to stakeholders even with regard to their production/import decisions.
This is precisely what it has done to manufacturers/importers in the agro-chemical sector. Before we look at the diktat, at the outset, a bit of background check is in order.
According to a statement by the then Union Agriculture Minister, Sharad Pawar in Parliament, nearly 10-30 per cent of crop production — valued at about Rs.1,50,000 crore a year — is lost due to pests and disease. Use of crop protection products or pesticides [as these are known in common parlance] is the most effective way of stemming these losses. Since, these are inherently hazardous substances having implications for the human and animal health and environment, their ‘safe’ and ‘judicious’ use is of paramount importance.
The manufacturing, import, sale, distribution and use of pesticides is regulated under the Insecticides Act [1968] with a view to prevent risk to human beings or animals, and for matters connected therewith. The Registration Committee [RC] – set up under the Act – registers every pesticide after scrutinizing the formula, verifying claims of efficacy and safety to human beings and animals and specifying the precautions against poisoning and any other functions. The RC is empowered to refuse registration of any pesticides if issues pertaining to safety have not been satisfactorily adhered to.
An applicant wanting to register a new product ‘first time’ in India is required generate data to demonstrate its ‘safety’ and ‘efficacy’ in Indian conditions in addition to hundreds of million dollars spent globally on toxicity and chemistry studies. Once this registration is granted under Section 9(3) of IA [1968], subsequent applicants can get registration under Section 9(4) for the same product on payment of nominal fee ‘without having to submit any data’.
As a result, for every registration u/s 9(3), there are multiple registrations u/s 9(4). Currently, there are over 250,000 registrations corresponding to only 280 registered pesticide molecules or close to 900 per molecule [process of issuing such registrations continues at an alarming pace]. A wonderful opportunity to ride piggy back on innovator has made way for non-serious players who have little regard for quality and standards.
To rein in such irresponsible registrations, in 2000, the RC issued guidelines for grant of registration for ‘formulation import without registering the technical’. In the absence of registration of technical, imported formulation cannot be copied thereby preventing the new solution from falling into unsafe hands. It also gives an opportunity to innovator for amortizing cost incurred on getting registration and educating farmers.
The policy gives desired incentive to R&D companies to bring new crop protection technologies to farmers doorsteps. It also enables government exercise better regulation with few companies to track and supervise during the initial phase of introduction when farmers need proper guidance and counseling for their optimum use. On a total spend of about Rs 10,000 crores, farmers have reaped Rs 50,000 crores in terms of higher yield and better quality crops.
While, there is compelling need to continue with this dispensation to enable farmers get higher yield, enhanced crop quality and increase income, in a major setback, in a special meeting held on December 6, 2017 [381st], RC took the following decisions:-
If an applicant is possessing a certificate of registration of a product Technical or Formulation for indigenous manufacturing, the same applicant shall not be allowed for registration of the same pesticide Technical or Formulation under any import category.
If technical of a pesticide is registered for indigenous manufacture to any firm, then application for registration of Formulation Import (FI) of such pesticide molecule shall not be considered.
An affidavit shall be obtained from the applicants for import of already registered Technical pesticide under TI u/s 9(3) and TI-New Source u/s 9(3) categories, about status of registration of the same technical for indigenous manufacture u/s 9(3)/9(4) in the name of the same Firm for use in the country. This requirement may be imposed with immediate effect including the applications under scrutiny process.
An affidavit shall be obtained from the applicants for import of formulation without registering technical u/s 9(3) about status of registration of technical of the same product for indigenous manufacture u/s 9(3)/9(4) in the name of same firm or any other firm for use in the country. This requirement may be imposed with immediate effect including the applications under scrutiny process
Taking registration is a fundamental requirement for import or manufacture of any pesticide. Hence, the decisions effectively mean that a company having registration for manufacturing a pesticide in India, is barred from importing the same. In case, it is importing a pesticide, it is being forced to manufacture the same in India. It tantamount to giving a boost to domestic production by replacing import.
If, a pesticide – Technical or Formulation – coming from a global facility can meet the requirement of Indian farmer in a manner so as to generate maximum value, why should it be disallowed? Likewise, why a company already supplying solutions through import should be forced to set up facilities for manufacture in India?
Issuance of such diktats will discourage R&D based companies from bringing new crop protection technologies to the doorsteps of farmers and aggravate irresponsible registrations [for instance, if an innovator is forced to register Technical in India, this will lead to copying]. Eventually, the farmers and Indian agriculture will lose. Pursuing “Make in India” at their cost is unacceptable.
The sole consideration by RC for registering a pesticide is to convince itself about its ‘safety’ and ‘efficacy’. It cannot make an assault on the freedom of an entity to decide whether to produce a given pesticide in India or import. Issuing orders in regard to such a determination is also a gross violation of the principle of ‘free’ and ‘fair’ trade and will be vulnerable to challenge at WTO.
Prime Minister should take note and get the above retrograde decisions of the RC rescinded.