Agricultural machinery makers have sought rationalisation of customs duty and GST to make domestic manufacturing more competitive in the upcoming Union Budget, besides making a pitch for production linked incentive for the sector.

“Even after achieving more than 50% indigenisation through in-house manufacturing, we still need to import several critical parts, including special steel. Unfortunately, the current duty/tax structure makes Indian manufacturers uncompetitive. Therefore, we request the Finance Minister to reduce customs duty on spare parts. Also the non-automotive engines should be treated as spare parts as they are critical for farm mechanisation and increase in efficiency. All spare parts should be at a lower customs duty and GST slab to help indigenise,” said Ravindra Agrawal, Chairman, KisanKraft Ltd.

All farm-machinery tyres should be charged the same as tractor-tyres at 18 per cent and not 28 per cent, Agrawal said adding that Govt should encourage indigenisation by reducing tender deposits, earnest money deposit, besides providing a weighted deduction of more than 200 per cent for R&D expenses, while extending PLI for agriculture, farm machinery and allied industries.

Mrityunjaya Singh, Managing Director, CLASS India Pvt Ltd, said the domestic manufacturing of combine harvesters should be promoted under the Make In India programme. The combine harvester executes a key farming operation for the farmer and they are being short-changed by cheap, poor quality imports from countries like China and Thailand, that do not have a proper warranty or after-market support. This has led to the creation of a lot of NPAs and bankruptcy for thousands of farmers who got lured to buy such machines by their initial cost and then could not get any support from importing agents or their manufacturers for spare parts and service support. A customs duty of 75 per cent should be levied on combine harvesters to bring in a level playing field for imported and domestic options a the farm gate level, he said. Singh also suggested that the RoDTEP benefit for export of combine harvesters if increased to 4 per cent from current benefit of 1 per cent could possibly result in a 10-15 per cent export of combine harvesters.

Disbursal of subsidies

Randhir Chauhan, MD, Netafim India and SVP Netafim, said the delays in the disbursal of micro-irrigation subsidies under the PMKSY programme have hampered its progress. Online portal for an end-to-end process execution and visibility, transparency in the process for fund disbursement, ensuring checkpoints at various stages and adherence to timelines would bring efficiency in subsidy disbursal and support farmers to be debt-free in a faster way, he said. Policymakers should push for drip irrigation usage in water-guzzling crops such as rice, wheat, and sugarcane.

Chauhan said providing infrastructure status would help the micro-irrigation manufacturer (95 per cent of which comes under MSME) to reduce operating costs, thereby accelerating the industry growth, and bringing the equipment cost down for the farmer community. Making farmers energy-sufficient would also reduce the burden on the government’s energy subsidy bills. Solar installation-friendly agriculture would help farmers with reduced operational costs, boost land utilisation and improve overall income.

Shekar Sivasubramanian, CEO, Wadhwani AI, said, “Small farmers in India depend on government and non-profit programmes at every step of the crop cycle. Timely, accurate, and hyperlocal AI-based early-pest warning and advisory can augment human capabilities to overcome systemic challenges in these large-scale programmes. In the upcoming Budget, a continued focus on building sustainable AI capacities to support large-scale deployment of AI solutions will go a long way in creating a material impact on the lives of the underserved people of India. The opportunities are immense, the time is right, and it is for us to get this done.”

KC Ravi, Chief Sustainability Officer, Syngenta India Pvt Ltd, said the Budget should consider reducing GST on crop protection products, farm equipment, seeds and other inputs. An enhanced outlay for PM-KISAN will also ensure farmers get more liquidity to buy inputs. The industry is also expecting that the Government should devise a special PLI scheme for the agro-chemical sector which will have a spiralling effect on boosting manufacturing in India.

“We are anticipating further impetus to use of technology including drones in agriculture, as a follow up of the previous year’s announcements. The proposed digital crop survey, which shall enable a shift from the old patwari system to a more robust AI/ML and GIS-GPS driven mapping of cropland, will not only benefit the Government but also the private industry. We are expecting some announcements in the Budget on this,” Ravi said.