P I Industries Ltd Management Discussions

Global economic outlook: navigating a shifting global landscape

During FY2024-25, the global economy experienced moderate growth amid a complex interplay of opportunities and challenges. According to the International Monetary Funds (IMF) World Economic Outlook, global growth is projected to drop to 2.8% for CY 2025, significantly below the historical average of 3.7%. This signals a period of subdued economic expansion, influenced by structural shifts, policy transitions, and macroeconomic uncertainties.

While the global economy continues to grow at a subdued pace amid a complex and evolving set of challenges—most notably, the rising trend of protectionist policies. Many economies have introduced tariffs, trade restrictions, and reshoring strategies to strengthen domestic industries. A notable trend within this movement is the use of reciprocal tariffs, where countries respond to foreign tariffs with equivalent countermeasures. While intended to level the playing field, these tit-for-tat strategies have often escalated trade tensions, leading to fragmented markets and retaliatory trade cycles. These developments have exerted upward pressure on input costs and reduced overall trade efficiency. Despite these headwinds, global growth has remained resilient, though increasingly uneven across regions and sectors. The heightened uncertainty surrounding international trade policies has also dampened investment flows and corporate expansion strategies, prompting businesses to adopt a more cautious and risk- averse approach to capital allocation. The impact of these protectionist measures and broader policy uncertainty is being felt unevenly across geographies.

As per IMF, advanced economies are projected to grow at a modest 1.4% in 2025, with the United States seeing a slowdown to 1.8%—a 0.9 percentage point drop from previous estimates—on account of softer demand, trade frictions, and fiscal recalibrations. Euro area growth is expected at 0.8%, down by 0.2 percentage point. In emerging markets and developing economies, growth is forecasted to decelerate to 3.7% in 2025 and 3.9% in 2026, with China facing sharper downgrades due to its exposure to global trade volatility.

Geopolitical tensions remain a major risk, significantly impacting global markets and business confidence.

Ongoing conflicts in key regions have disrupted trade routes, exacerbated energy and commodity price volatility, and heightened the risk of economic fragmentation.

The Russia-Ukraine conflict has sustained pressure on global food and fertilizer supply chains, while instability in the Red Sea region has led to the rerouting of major shipping lanes, increasing freight costs and delivery timelines. Simultaneously, tensions surrounding Taiwan and strategic chokepoints in East Asia have heightened investor uncertainty and prompted reassessments of manufacturing and sourcing strategies. These conflicts need a peaceful resolution. The World Economic Forum (WEF) identifies state-based armed conflict as the most pressing global risk. Furthermore, sanctions, export controls, and retaliatory trade measures have added layers of complexity to international business operations. Supply chain diversification is no longer a strategic option but a necessity, leading to higher operational costs and a potential reconfiguration of global trade patterns.

While inflationary pressures have moderated in some economies, they continue to pose challenges, driven by supply-side constraints, fluctuating commodity prices, and labor market imbalances. Inflationary dynamics continue to vary significantly across regions, reflecting differences in monetary policy responses, commodity exposure, and domestic demand patterns. While global headline inflation is expected to decline gradually, reaching 4.3% in 2025 and 3.6% in 2026, the pace of moderation has been slower than initially anticipated. The United States recorded an inflation rate of 2.4% in FY2024-25, a decline from the previous year, while Europe saw an increase to 2.4%. Chinas inflation remained stagnant at 0.2%, reflecting subdued domestic demand and price levels. In India, inflation eased to 5.22%, down from the previous year, supported by improved supply-side conditions and calibrated monetary tightening. In contrast, Latin America, though still facing relatively high price levels, saw a reduction in inflation to 7.2%. This divergent inflationary landscape has led central banks to adopt differentiated strategies—ranging from sustained high interest rates in some developed markets to a cautious easing stance in select emerging economies. However, the prolonged high-rate environment in several regions has tightened financial conditions, especially in capital-dependent markets, and may continue to weigh on investment and consumption patterns in the near term.

The global workforce is also undergoing structural shifts, with automation, artificial intelligence, and digital transformation redefining labor markets. While technology-driven advancements enhance productivity, they also introduce challenges such as job displacement and widening economic inequalities. Across industries, AI-powered tools are being adopted to streamline operations—ranging from predictive maintenance in manufacturing to AI-driven customer service in the financial sector. In logistics and retail, automation technologies such as robotic process automation (RPA) and autonomous warehousing systems are increasingly replacing manual roles, while in agriculture, precision farming tools powered by AI and IoT are optimizing input use and crop yields. While these innovations enhance productivity and operational efficiency, they also present significant challenges—including displacement of routine and midskill jobs, and the potential for widening socioeconomic disparities. The World Economic Forum estimates that while 69 million new jobs may be created globally by emerging technologies by 2027, around 83 million existing roles may be lost or fundamentally altered. To ensure inclusive and sustainable employment growth, it is imperative for businesses and governments to prioritize large- scale investments in workforce reskilling, digital literacy programs, and vocational education tailored to evolving industry needs. The emphasis must shift from reactive upskilling to proactive, future-ready capability building to support long-term economic resilience.

Sustainability continues to be a strategic priority for governments and businesses alike, driven by intensifying climate risks, evolving stakeholder expectations, and increasingly stringent regulatory mandates. The WEF ranks extreme weather events as the top long-term global risk over the next decade. Climate-related policies, carbon pricing mechanisms, and evolving regulations are compelling industries to adopt sustainable business practices. However, the financial burden of this transition, particularly in capital-intensive industries, could weigh on short-term profitability. Additionally, global food security concerns—exacerbated by climate change, extreme weather, and biodiversity loss—pose risks to agricultural production and commodity supply chains. Key policy shifts—such as the European Unions Carbon Border Adjustment Mechanism (CBAM) and the EU Omnibus Directive on Corporate Sustainability Reporting—are reshaping global trade and disclosure norms. These regulations require companies exporting to the EU to account for the embedded carbon in their products and ensure greater transparency on ESG performance, with noncompliance potentially resulting in market access barriers and reputational risks. In response, several businesses have started integrating low-carbon technologies and expanding renewable energy use to reduce their Scope 1, 2, and 3 emissions. For instance, multinational manufacturers are reconfiguring supply chains to source greener raw materials and investing in digital product passports to enhance traceability and compliance. However, many small and medium-sized enterprises (SMEs) face significant challenges in meeting these evolving standards due to limited access to climate finance, technical know-how, and regulatory guidance. To remain competitive and future- ready, companies are increasingly embedding sustainability into core business strategy—ranging from green product innovation to circular economy initiatives and nature- based solutions. Policymakers, in parallel, are enhancing incentives for green investments, mandating climate risk disclosures, and promoting sustainable finance frameworks to align capital flows with climate goals.

In this evolving economic landscape, businesses must adopt agile strategies to navigate shifting trade dynamics, regulatory complexities, and market volatilities. The ability to adapt to geopolitical uncertainties, inflationary pressures, and technological disruptions will be critical for long-term resilience and growth. As economies transition toward a more digitally integrated and sustainable future, organizations that embrace innovation, operational flexibility, and sustainability-driven growth models will be best positioned to thrive.

As global value chains are reimagined for resilience and sustainability, innovation-led enterprises find themselves at a crucial inflection point — where adaptability and scientific problem-solving are not just strategic tools but existential imperatives. For companies like ours, this evolving macroeconomic environment provides fertile ground to deploy science-backed solutions that address real-world complexities—whether in food production, healthcare delivery, or environmental management. In this environment, the role of responsible innovation in addressing shared global challenges has never been more pronounced.

Indias economic momentum: resilience meets reform

Indias economy demonstrated robust growth and resilience amid global uncertainties in FY2024-25. According to the Organization for Economic Co-operation and Development (OECD), Indias gross domestic product (GDP) is projected to grow by 6.5% in FY2024- 25, positioning it as one of the fastest-growing major economies. This growth is underpinned by strong fundamentals, including strong domestic consumption, accounting for nearly 60% of GDP, and bolstered by sectors such as construction, trade, and financial services. Despite global headwinds, Indias resilience is underpinned by robust domestic demand, targeted government policies, and dynamic sectoral performance.

At the sectoral level, agriculture is projected to grow at 3.8%, supported by gains in horticulture, livestock, and fisheries, alongside record kharif foodgrain production of 1647.05 LMT. The industrial sector is estimated to expand by 6.2%, driven by a resurgence in manufacturing and increased infrastructure push. Meanwhile, Indias services sector remains a powerhouse, with services exports surging 12.8% YoY during April-November FY2024-25, up from 5.7% the previous year. A notable highlight is the 8.2% growth in capital expenditure during July-November 2024, with expectations of further acceleration. Government-backed schemes like the INR 50,000 crore Self-Reliant India Fund are facilitating equity support to MSMEs, while deregulation efforts are aimed at boosting private sector participation and long-term growth. On the trade and investment front, overall exports grew by 6.0% YoY, and gross FDI inflows rose to USD 55.6 billion—a 17.9% increase from the previous year. Forex reserves at USD 640.3 billion ensure external stability, covering nearly 11 months of imports and 90% of external debt. Capital markets remain vibrant, with BSE market capitalization-to-GDP ratio at 136%, significantly outperforming global peers. (Data as per Economic Survey 2024-25, Press Information Bureau, Government of India)

Notably, public social sector spending registered a 15% CAGR between FY2020-21 and FY2024-25, with government health expenditure nearly doubling and the unemployment rate dropping to 3.2% from 6.0% in FY2017-18. The macroeconomic environment is further stabilized by a softening of headline retail inflation to 4.9% during April— December 2024. Inflation is expected to align with the RBIs target of ~4% by FY2025-26, aided by prudent monetary policy and easing commodity prices. Looking ahead,

Indias medium-term growth will be shaped by continued investments in infrastructure, digitalization, energy transition, and collaborative efforts to responsibly harness emerging technologies such as AI.

The Reserve Bank of India (RBI) played a pivotal role in steering monetary policy to support economic growth while maintaining price stability. In February 2025, the RBIs Monetary Policy Committee (MPC) reduced the policy repo rate by 25 basis points from 6.50% to 6.25%, marking the first rate cut in five years (this was further reduced to 6% post 31st March 2025). Consequently, the reverse repo rate was adjusted to 3.35%. The Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) were maintained at 4.00% and 18.00%, respectively, to ensure adequate liquidity in the banking system. These measures were implemented against a backdrop of moderating inflation, with the Consumer Price Index (CPI) inflation easing to 3.6% in February 2025, a seven-month low attributed to a correction in food prices.

On the fiscal front, the government has introduced a contractionary budget aimed at reducing the fiscal deficit to 4.4% of GDP in FY2025-26, down from 4.8% in the previous fiscal year. This reduction is driven by cuts in revenue spending and higher tax collections. Additionally, the government plans to shift its fiscal focus from deficit targets to managing the debt-to-GDP ratio, aiming to reduce it to 50% by March 2031 from the current 57%.

The governments continued push for structural reforms, including the Production-Linked Incentive (PLI) schemes and infrastructure modernization, has enhanced Indias manufacturing competitiveness and global trade positioning. Furthermore, Indias demographic advantage, with a young and rapidly expanding workforce, ensures sustained labor market resilience and innovation-driven growth.

Geopolitically, India has adeptly navigated global tensions, maintaining balanced diplomatic ties with key economic partners while strengthening trade relations with emerging markets. As global companies seek to de-risk supply chains, Indias stable policy environment and cost-effective manufacturing ecosystem make it a preferred destination for foreign direct investment (FDI) and supply chain diversification.

The Indian economy has displayed remarkable resilience and sustained growth momentum, supported by structural reforms, a strong consumption base, and increased public and private investment. With emphasis on digitalization, sustainability, and self-reliance, India is evolving into a hub of high-impact innovation across sectors such as agriculture, pharmaceuticals, and industrial manufacturing. In this dynamic landscape, PI is uniquely positioned to contribute to national priorities through science-led solutions that empower farmers, enrich lives, and enhance the quality of ecosystems. As India shapes its next decade of growth, the convergence of innovation, inclusive development, and sustainability will define the new paradigm-one where science touches everyday life in transformative ways.

Global agricultural sector: feeding the future

Agriculture remains the backbone of global food security and economic stability, playing a critical role in sustaining the worlds growing population. With the global population expected to reach 9.7 billion by 2050 (United Nations), food production must increase by nearly 70% to meet future demand. The sector also contributes significantly to employment, with over 27% of the global workforce engaged in agricultural activities (World Bank). As of CY 2024, global primary crop production reached 9.9 billion tonnes, marking a 27% increase since 2010 (FAO). The agricultural market is forecast to expand at a CAGR of 4.2%, reaching USD 16.2 trillion by 2030 (Fortune Business Insights).

Behind this impressive growth story lies a more sobering reality. The sectors continued expansion is being tested by systemic vulnerabilities that threaten to reverse hard-won gains. Without decisive interventions, the gap between rising demand and volatile supply could widen, exacerbating food insecurity and economic instability.

Sustaining this growth trajectory is increasingly challenging, as the sector must navigate a complex set of headwinds that threaten both productivity and resilience. Global agriculture faces mounting pressures from climate change, resource constraints, and geopolitical tensions. Unpredictable precipitation patterns, prolonged droughts, and extreme weather events continue to disrupt food production. In CY 2024, grain output in Europe declined by 15% due to severe droughts, while floods in Asia wiped out 20% of rice crops (FAO). Rising temperatures are enabling pests and crop diseases to spread to new regions, with annual crop losses due to pests estimated at 40%, translating into economic losses exceeding USD 220 billion (Council on Strategic Risks). Additionally, overuse of chemical fertilizers and unsustainable land use practices have rendered 30% of the worlds arable land unproductive, further straining food supply chains. Agriculture remains the largest consumer of freshwater, accounting for 70% of global usage, exacerbating water shortages in key farming regions (World Bank). Trade restrictions, export bans, and supply chain disruptions stemming from geopolitical conflicts and protectionist policies have further compounded global agricultural vulnerabilities, delaying progress toward achieving SDG Goal 2-Zero Hunger (OECD-FAO Agricultural Outlook).

To mitigate these risks and drive agricultural transformation, the sector is undergoing rapid innovation. The global biologicals market-which includes biofertilizers, biopesticides, and biostimulants-is forecasted to grow at a CAGR of 13.7%, reaching USD 28.7 billion by CY 2028 (Markets and Markets), driven by the demand for sustainable crop protection solutions. The adoption of precision farming, regenerative agriculture, and agroforestry practices is accelerating, supported by institutions like the World Bank, which allocated USD 6 billion in CY 2024 for climate-resilient agriculture programs in developing economies (World Bank). Additionally, AgTech investments are projected to exceed USD 22 billion by CY 2026, with advancements in AI-driven analytics, blockchain for supply chain traceability, and drone-assisted farming revolutionizing agricultural efficiency.

At this pivotal juncture, the infusion of science and technology into agriculture is not a luxury-its a necessity. As the global agricultural sector navigates these challenges, technological innovation, sustainability-driven reforms, and collaborative policy measures will be key enablers of longterm resilience. By empowering through innovation and leveraging smart farming techniques, digital transformation, and climate-adaptive strategies, agriculture is well- positioned to balance productivity with environmental stewardship. With the right interventions, the sector can continue its expansion while securing global food systems for future generations.

At PI, we are harnessing data-driven insights, biological advancements, and scalable delivery platforms to help farmers transition from subsistence to sustainability. Our work goes beyond improving yields—its about enhancing livelihoods, restoring ecosystems, and embedding resilience at the very root of the agricultural value chain. This is where our belief in science meeting life finds real-world expression — in the fields, with the farmers, and across the rural economy.

Indian agricultural sector: harvesting progress

Indias agricultural sector has long been the backbone of its economy, playing a crucial role in ensuring food security, employment, and rural development. With nearly 70% of rural households dependent on agriculture for their livelihood, the sector supports the largest workforce in the country. Despite its dominance in employment, agriculture contributes approximately 16% to Indias gross domestic product (GDP) (Ministry of Agriculture & Farmers Welfare). Over the past decade, agricultural income has grown at an average annual rate of 5.23%, driven by policy interventions, increased mechanization, and improved crop yields. In the last crop year, India achieved a record-breaking food grain production of 332.22 million metric tonnes, with rice output reaching an alltime high of 137.82 million tonnes. In Q2 FY2024-25, the sector expanded by 3.5%, reinforcing its resilience despite climatic and economic uncertainties. However, ensuring sustainable agricultural growth remains a challenge, given the increasing stress on natural resources, climate variability, and the predominance of small and fragmented landholdings.

As per the Ministry of Agriculture and Farmers Welfares Second Advance Estimates for 2024-25, India has achieved record production levels across multiple key crops. Total foodgrain output is projected at 3,309.18 LMT, comprising 1,663.91 LMT from Kharif and 1,645.27 LMT from Rabi seasons.

Record production has been reported for:

• Rice (Kharif: 1,206.79 LMT; Rabi: 157.58 LMT)

• Wheat (1,154.30 LMT), Maize (Kharif: 248.11 LMT; Rabi: 124.38 LMT)

• Groundnut (Kharif: 104.26 LMT), and Soybean (151.32 LMT)

• Soybean - 151.32 LMT (Record)

Notably, Kharif rice output increased by 74.20 LMT and soybean production rose by 20.70 LMT over the previous year. Oilseed production stands at 276.38 LMT (Kharif) and 140.31 LMT (Rabi), while sugarcane output reached 4,350.79 LMT and cotton production touched 294.25 lakh bales. These estimates were derived through remote sensing, stakeholder consultations, and Crop Cutting Experiments (CCEs), reinforcing the governments continued emphasis on boosting farm output through targeted policy support and agricultural reforms.

To enhance farmer incomes and strengthen the agriecosystem, the Government of India has implemented a suite of policy reforms and flagship schemes backed by substantial budgetary allocations. These include direct income support (PM-KISAN), crop insurance (PMFBY), institutional credit expansion, and MSP guarantees at 1.5x cost of production. Complementary programs promote organic farming, micro-irrigation (Per Drop More Crop,

Micro Irrigation Fund), and agri-infrastructure development (AIF, Kisan Rail, e-NAM, logistics). Strategic efforts also focus on FPO formation, soil health monitoring, horticulture cluster development (MIDH), mechanization, and use of emerging tech (e.g., Namo Drone Didi). Additionally, initiatives like the National Mission for Edible Oils - Oil Palm, National Beekeeping and Honey Mission, and agri start-up support systems underscore the governments integrated approach to improving productivity, sustainability, and global agri-trade performance. The Kisan Credit Card (KCC) has emerged as a key tool for promoting financial inclusion in the rural agricultural sector, showing substantial growth in coverage over the past five years. In total, 44% of agricultural households were found to possess a valid Kisan Credit Card (KCC), this increases to 77% among those with land holdings greater than 0.4 hectares.

Despite its steady growth and government initiatives, the Indian agricultural sector faces multiple headwinds.

As per National Sample Survey Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI), over 89% of Indian farmers operate on small and marginal landholdings, limiting economies of scale and mechanization. Unpredictable weather patterns, erratic monsoons, and extreme climate events such as floods and droughts continue to pose significant risks to crop yields and farmer incomes. Nearly 50% of cultivated land remains rainfed, making irrigation access and water management critical concerns for long-term agricultural sustainability.

The reliance on chemical-intensive farming practices has led to declining soil health, while post-harvest losses and inadequate storage infrastructure continue to impact farmer earnings. Additionally, price volatility, supply chain inefficiencies, and fluctuating global demand further add to the complexities of the sector.

Recognizing the need for modernization, India is undergoing a transformational shift towards smart and technology- driven agriculture. Key trends shaping the future of the sector include:

• Precision agriculture & smart farming: The adoption of AI, IoT, and satellite-based monitoring systems is helping farmers optimize resource usage, predict weather patterns, and enhance productivity. The Digital Agriculture Mission and e-NAM (National Agriculture Market) are accelerating the digital transformation of Indian farming by providing access to real-time price discovery and efficient market linkages

• Sustainable & climate-resilient agriculture: Government schemes such as Per Drop More Crop (PDMC) and the National Mission on Sustainable Agriculture (NMSA) are promoting water conservation, organic fertilizers, and climate-adaptive farming techniques to ensure long-term agricultural viability

• Boosting domestic crop production: A six-year program has been launched to increase pulse production and reduce import dependency, with state-backed procurement of pigeon peas, black matpe, and red lentils at guaranteed prices. Simultaneously, efforts are underway to revive cotton yields, particularly extra-long staple varieties, through enhanced R&D and productivity- focused interventions

• Infrastructure & supply chain modernization: Investments in cold storage, logistics, and processing facilities are helping reduce post-harvest losses and improve farm-to- market efficiency, ensuring higher returns for farmers and minimizing food wastage

As India positions itself for the future, technology, sustainability, and policy reforms will drive the next wave of agricultural growth. The shift towards digital platforms, smart farming practices, and climate-adaptive solutions will enhance productivity while ensuring environmental stewardship. The governments continued focus on structural reforms, irrigation efficiency, and supply chain integration will be critical in securing Indias food security while empowering smallholder farmers with better income opportunities. With a rapidly evolving global landscape, Indias agricultural sector is on a path to becoming more resilient, innovative, and globally competitive, paving the way for a future where science and life are intertwined.

Global agrochemical industry: crop protection in a changing world

The global agrochemical industry plays a pivotal role in sustaining agricultural productivity and ensuring food security for a growing population. Without effective crop protection solutions, global agricultural output could decline significantly, with an estimated 20% to 40% of crop yields lost annually due to pests, diseases, and weeds . For instance, the fall armyworm (Spodoptera frugiperda) has the potential to reduce maize yields by approximately 17.7 million metric tonnes per year if left unchecked. Additionally, fungal diseases such as wheat rust and rice blast continue to threaten staple crop production, while herbicide-resistant weed species have increased production costs for farmers worldwide. These challenges underscore the indispensable nature of agrochemicals in maintaining stable food supply chains and mitigating the risks posed by biotic stresses.

Given their essential role in securing agricultural output, agrochemicals have become a cornerstone of the global agricultural economy, reflected in the sectors sustained market growth and innovation. In FY2024-25, the global agrochemical market was valued at approximately USD 297.7 billion, with projections indicating a CAGR of 3.2% from CY 2025 to CY 2033 reaching USD 394.8 billion (IMARC). Market expansion is being driven by the rising global demand for food, increasing adoption of high-yield crop varieties, and the need for improved agricultural efficiency. The sector encompasses various agrochemical categories, each playing a critical role in modern agricultural systems.

Insecticides form a key segment, addressing crop losses caused by pests such as locusts, caterpillars, and borers. In CY 2024, global insecticide sales were estimated at USD 18.4 billion, with neonicotinoids accounting for 25%, pyrethroids 17%, and diamides 13% of the total market. Herbicides represent the largest segment, driven by the increasing adoption of herbicide-tolerant crops. Glyphosate remains the most widely used herbicide globally, though concerns over resistance have spurred investments in alternative formulations. Fungicides are essential in combating fungal infections in crops such as wheat, rice, and fruits, preventing major yield losses due to pathogens like powdery mildew and rust. In addition, other agrochemicals such as plant growth regulators, nematicides, and soil conditioners continue to gain traction, particularly in markets where sustainable farming practices are being prioritized.

Despite sustained growth, the agrochemical industry faces several challenges, including escalating raw material prices, regulatory complexities, and evolving environmental policies that demand greater compliance. The rise of generic agrochemical products has intensified competition, prompting leading manufacturers to invest in research and development to create differentiated offerings. Pesticide resistance is also a growing concern, with over 500 pest species having developed resistance, leading to increased crop losses despite higher pesticide application. Climate change-induced shifts in pest dynamics and extreme weather events further complicate agricultural planning, necessitating more adaptive and resilient agrochemical solutions.

To navigate these challenges, industry players are expanding their portfolios to include biological crop protection solutions and integrated pest management strategies.

The global biologicals market is projected to grow at a CAGR of 13.7%, reaching USD 28.7 billion by CY 2028, reflecting a shift toward sustainable and environmentally friendly alternatives. Companies are also leveraging digital agriculture technologies, including AI-driven pest prediction models, blockchain for supply chain traceability, and drone- assisted pesticide application, to enhance efficiency and precision in crop protection.

As the global population continues to rise, the agrochemical industry will remain critical in ensuring food security and agricultural sustainability. By embracing innovation, regulatory compliance, and environmentally responsible practices, the industry is poised to meet future challenges while contributing to a smarter, more resilient agricultural landscape. The integration of technology, biological solutions, and precision farming techniques will define the next phase of growth, positioning agrochemical companies as key enablers of global food security.

The global agrochemical sector is undergoing a paradigm shift, driven by regulatory reforms, increasing environmental scrutiny (especially in the EU), and the accelerated adoption of sustainable practices. Innovation is now centered around creating safer, more efficient, and environmentally aligned crop protection solutions. PI stands at the forefront of this evolution, leveraging our R&D prowess to develop next-generation molecules and novel formulations that meet the demands of precision agriculture. Our commitment to responsible chemistry and green manufacturing is enabling a new era of crop care— one that balances productivity with planetary health. As the sector redefines its purpose, PI remains a catalyst for transformation, where scientific breakthroughs translate into practical benefits for both growers and the globe.

Indian agrochemical industry: growth rooted in innovation

The Indian agrochemical industry is a cornerstone of the nations agricultural framework, playing a pivotal role in enhancing crop productivity and ensuring food security for its vast population. Given that approximately 15-25% of potential crop production is lost annually due to pests, weeds, and diseases, the application of agrochemicals becomes indispensable in mitigating these losses and sustaining agricultural output. Recognizing the sectors significance, the Government of India has identified the agrochemical industry as one of the top 12 sectors poised for global leadership, underscoring its strategic importance in the countrys economic and agricultural development.

The industry has witnessed robust growth, with the domestic market valued at approximately USD 7.5 billion and projected to expand at a compound annual growth rate (CAGR) of 8-10% over the coming years. India has emerged as the second-largest exporter of agrochemicals globally, surpassing the USA. This growth trajectory is fueled by factors such as decreasing arable land, evolving pest complexes, and the increasing adoption of high-yield crop varieties necessitating effective crop protection solutions.

Despite its upward trajectory, the Indian agrochemical sector faces several challenges. The registration process for new molecules is often perceived as complex and time-consuming, leading to substantial research and development expenditures. Additionally, the industry contends with issues like declining soil fertility, heavy dependence on monsoon rains, and the emergence of pest resistance to generic products. These factors underscore the need for streamlined regulatory processes and the development of innovative, sustainable agrochemical solutions.

Opportunities within the sector are abundant. The convergence of biotechnology, nanotechnology, and information technology i s opening new frontiers in crop protection and enhancement. Companies are investing in digital platforms and precision agriculture technologies to improve efficiency and product efficacy. Furthermore, government initiatives aimed at bolstering cold-chain infrastructure and reducing post-harvest losses are set to enhance the agrochemical supply chain, ultimately aiming to double farmers incomes.

Supported by favorable government policies and a focus on innovation, is well-positioned for substantial growth. By addressing challenges such as regulatory compliance and pest resistance, and leveraging opportunities through technological integration and strategic initiatives, the industry aims to enhance agricultural productivity and contribute significantly to the nations economy, aligning with the overarching theme of shaping a smarter, more sustainable future.

Horticulture industry: in full bloom

The global horticulture industry continues to demonstrate sustained growth, underpinned by increasing consumer demand for fresh fruits and vegetables, the adoption of sustainable farming practices, and continuous advancements in agricultural technology. According to the Food and Agriculture Organization (FAO), the global horticulture market is projected to expand at a compound annual growth rate (CAGR) of 5.2% between CY 2024 and CY 2028, primarily fueled by the rising preference for organic produce, innovations in controlled environment agriculture (CEA), and the development of climate-resilient crop varieties. Climate change has significantly impacted traditional farming practices, leading to an accelerated shift toward CEA methods such as hydroponics, aeroponics, and vertical farming. Additionally, the integration of artificial intelligence (AI), the Internet of Things (IoT), and automation in horticulture is enhancing precision farming, optimizing resource utilization, and improving overall productivity. The global organic food market is expected to reach $620 billion by CY 2028, growing at a CAGR of 9.1%, reflecting an increasing consumer shift toward healthier and environmentally sustainable food choices.

India has established itself as one of the worlds largest producers of fruits and vegetables, with the horticulture sector contributing over 30% to the countrys agricultural GDP. According to the Department of Agriculture & Farmers Welfare (DAFW), Indias horticulture production for FY2024-25 is expected to surpass 350 million metric tons, driven by a combination of government incentives, rising export demand, and widespread adoption of agritech solutions. Recognizing the sectors critical role in enhancing agricultural resilience and ensuring food security, the Union Budget 2025-26 has earmarked INR 5,000 crore ($600 million) for the expansion of horticulture infrastructure. This investment is primarily directed toward strengthening cold storage networks, improving supply chain efficiencies, and facilitating export growth. Additionally, the government has increased subsidies under the National Horticulture Mission (NHM) to promote high- value crop cultivation. The Production-Linked Incentive (PLI) scheme for agri-tech startups and precision farming is further driving investments in smart irrigation systems, farm mechanization, and AI-powered crop monitoring solutions, reinforcing the sectors digital transformation.

Indias horticulture exports reached a record $5.2 billion in CY 2024, with significant demand for mangoes, pomegranates, and processed vegetables from key markets in Europe, the Middle East, and Southeast Asia.

To enhance global competitiveness, the Agricultural and Processed Food Products Export Development Authority (APEDA) is working toward ensuring compliance with stringent phytosanitary regulations in the European Union and the United States, facilitating broader market access for Indian horticultural products. However, despite the sectors strong growth trajectory, several challenges persist. Erratic monsoon patterns and declining groundwater levels continue to impact production, prompting an increasing shift toward water-efficient practices such as drip irrigation and rainwater harvesting. India loses nearly 25-30% of its horticultural produce due to inadequate storage and transportation infrastructure. In response, the government is actively promoting public-private partnerships (PPPs) to develop a robust cold-chain network, thereby minimizing post-harvest losses and enhancing value chain efficiency.

Looking ahead, Indias horticulture sector is poised for sustained expansion, with a projected CAGR of 7.5% over the next five years. This growth will be driven by continued policy support, increasing urban demand, and expanding export opportunities. By leveraging advancements in technology, strengthening supply chains, and fostering a climate-resilient agricultural framework, India is well- positioned to reinforce its leadership in the global horticulture industry while ensuring long-term sustainability and economic prosperity.

Biologicals industry: a sustainable tomorrow

The agrochemical industry is undergoing a transformative shift, with agricultural biologicals and electronic chemicals emerging as pivotal areas of growth and innovation.

The global agricultural biologicals market is witnessing robust expansion, driven by the increasing demand for sustainable and eco-friendly farming solutions. According to Fortune Business Insights, the market was valued at USD 15.29 billion in CY 2024 and is projected to grow to USD 44.70 billion by 2032, at a CAGR of 14.41%. This momentum is fueled by the rising adoption of organic farming practices, stringent environmental regulations, and the need for sustainable agricultural inputs. However, despite the growing preference for biological alternatives, many farmers remain hesitant to transition from synthetic agrochemicals due to concerns over efficacy, shelf life, and performance across varying climatic conditions. Successful adoption requires extensive field trials, farmer education programs, and a robust regulatory framework that can accommodate innovation without compromising on safety and efficacy. Unlike traditional agrochemicals, biologicals must navigate complex and often ambiguous regulatory approval processes, resulting in extended product development timelines and increased costs. Additionally, the sector demands deep scientific expertise in microbiology, genetics, and plant health, while the manufacturing process involves intricate fermentation and formulation techniques that require specialized infrastructure. Scaling up production without compromising quality and stability remains a key challenge.

Despite these hurdles, the sector presents compelling opportunities, particularly for established players with strong distribution networks and regulatory expertise. Companies with an existing agrochemical portfolio can integrate biologicals into their offerings, leveraging crossselling synergies and optimizing application through precision agriculture and digital farming solutions. The increasing demand for sustainable farming, particularly in Western markets, presents a lucrative export opportunity. Moreover, advancements at the intersection of biotechnology and artificial intelligence are enabling the development of next-generation biofertilizers and microbial solutions tailored to specific soil and crop conditions. At the policy level, governments worldwide are offering subsidies and incentives to promote organic and regenerative farming, further accelerating the demand for biological alternatives.

Electronic chemicals: scaling with the semiconductor boom

Parallel to the rise of biologicals, , the electronic chemicals and materials market is experiencing significant expansion, propelled by the rapid growth of the electronics industry and advancements in artificial intelligence, the Internet of Things (IoT), and semiconductor manufacturing. As per MarketsandMarkets, the industry was valued at USD 59.1 billion in CY 2023 and is projected to reach USD 77.8 billion by CY 2028, growing at a CAGR of 5.6%.

This demand surge is largely attributed to the increasing reliance on semiconductors, printed circuit boards, and other high-purity electronic components that are critical to consumer electronics, automotive technology, and industrial automation. As global supply chains undergo shifts in response to geopolitical dynamics, there is an increasing emphasis on domestic manufacturing, reshoring, and securing supply chains for essential materials, further driving demand for electronic chemicals. However, stringent purity and quality standards pose barriers to entry, as manufacturing processes require highly controlled environments and precision-driven chemical formulations. The sector also demands significant capital investments in infrastructure and regulatory compliance, making scalability a key determinant of success.

PI is actively pursuing opportunities in both agricultural biologicals and electronic chemicals through:

Both agricultural biologicals and electronic chemicals are poised to shape the future of their respective industries, yet they remain complex and highly competitive markets with significant entry barriers. Companies with strong R&D capabilities, established supply chains, and deep regulatory understanding are best positioned to lead the transformation. The coming years will see a convergence of sustainability imperatives and technological advancements redefining these sectors, making adaptability, foresight, and strategic execution critical for long-term success.

The global biologicals industry is witnessing exponential growth as the world shifts towards more sustainable, residue-free, and environmentally safe agricultural practices. This transformation is powered by innovation at the molecular and microbial level—where biology becomes the new chemistry. At PI, our strategic focus on biologicals through our Plant Health Care vertical reflects our belief that the future of farming lies in nature-inspired science.

By blending frontier research with real-world agronomic applications, we are delivering products that regenerate soil health, enhance crop resilience, and reduce chemical dependency. In this convergence of life, sustainability, and science, we see not just a market opportunity, but a moral imperative—to reimagine agriculture in a way that truly brings science to life, on every farm and in every harvest.

Life sciences industry: driving diversification and value

The life sciences sector is at the forefront of global economic and societal progress, playing a crucial role in enhancing healthcare outcomes, driving scientific advancements, and supporting economic resilience.

As the world grapples with an aging population, rising chronic diseases, and evolving healthcare demands, the pharmaceutical and biotechnology industries are undergoing rapid transformation. Innovation in drug discovery, precision medicine, biologics, and advanced manufacturing technologies is reshaping the landscape, making the sector a key pillar of sustainable growth. With increasing healthcare expenditures and a shift towards outsourced pharmaceutical development and manufacturing, the industry is witnessing significant investments in research, infrastructure, and global partnerships.

The global pharmaceutical market is poised for substantial expansion, fueled by increased healthcare spending and the continued need for innovative treatments. According to IQVIA, the market is projected to grow from USD 1.6 trillion in CY 2023 to approximately USD 1.9 trillion by CY 2027, excluding COVID-19-related treatments. This growth is being driven by breakthroughs in biotechnology, the development of novel therapies, and the expansion of pharmaceutical accessibility in emerging markets. A crucial segment within this industry is the Contract Development and Manufacturing Organization (CDMO) market, which is experiencing heightened demand as pharmaceutical companies increasingly outsource research and production to specialized players. According to Research and Markets (2024), the global CDMO market is expected to grow at a CAGR of 6.5%, reaching USD 290 billion by CY 2028.