Sharda Cropchem Ltd Management Discussions

Global Economy

The global economy has entered 2025 at a critical juncture, facing rising uncertainty and a noticeable slowdown compared to the previous year. In its April 2025 World Economic Outlook, the International Monetary Fund (IMF) gave a cautionary forecast, anticipating global GDP growth at 2.8%, down from 3.6% projected in January. This revision is largely attributed to mounting trade tensions, particularly the imposition of sweeping tariffs by the US and retaliatory measures taken by its trading partners.

These shifts have intensified on global markets through a threefold disruption: rising tariff barriers, volatile currency movements, and fragmented capital flows. The impact of this fallout has been felt worldwide. According to the IMF, global growth in 2025 could have hit 3.2% without the imposition of these new tariffs, shedding light on the economic weight of protectionism.

Alongside the growth downgrade, inflation forecasts for 2025 have been revised slightly upward by 0.1 percentage point. This increase is due to the pass-through effects of tariffs and continued supply-side disruptions. Financial markets have responded through a sharp fall in the dollar index and equity sell-offs. Bond yields and crude oil prices also softened significantly.

Consequently, the IMF is calling for a coordinated policy effort to restore economic stability and revive investment. Key priorities include strengthening trade ties to ease uncertainty, advancing structural reforms to address demographic and labour market challenges, and fostering stronger international cooperation. Addressing these near and long-term issues is essential to building a more enduring, inclusive, and sustainable global economy.

Despite current headwinds, the global economy offers a cautiously optimistic medium-term outlook. While 2025 is marked by trade-related disruptions and policy uncertainty, the foundations for a gradual recovery are beginning to take shape. As conditions improve, the global GDP is likely to reach 3.0% in 2026, signalling stabilisation if corrective policies persist. Key indicators such as the easing of inflationary pressures, softening commodity prices, and the resilience of services and consumption in emerging markets point towards improving fundamentals. Structural reforms across major economies, along with efforts to normalise monetary and fiscal policies, are expected to create more stable investment environments.

Looking ahead, the global economy is poised to navigate this period of adjustment and emerge stronger, with new drivers of growth rooted in innovation, sustainability, and inclusive development.

India is projected to remain the worlds fastest-growing major economy, reaffirming its rising influence in the global economic order. The Reserve Bank of India (RBI) expects the nations economy to expand by 6.5% in 2024-25. This contrasts sharply with global growth estimates of 2.8% and 3.0% for the same period, highlighting Indias continued strength amid a weaker international environment.

Building on last years robust 9.2% growth, the Indian economy is expected to grow at 6.5% in 2024–25. This performance is underpinned by a broad-based recovery across agriculture, industry, and services. The agriculture sector continues to provide critical support to the economy, with foodgrain production estimated to touch a record 330.9 million tonnes – a 4.8% increase over the previous year. Favourable monsoons, expanding irrigation networks, and increasing adoption of high-yield crop varieties have strengthened rural incomes, improving the overall consumption environment.

Industrial activity is also gaining momentum, with estimated growth of 6.2% in 2024–25. This resurgence is being driven by improved capacity utilisation, government-led infrastructure investments, and easing input cost pressures. Meanwhile, the services sector remains buoyant, led by strong growth in

IT, financial services, and logistics all critical enablers of rising consumer and business activity. On the demand side, rural consumption is expected to remain steady, supported by a healthy agricultural outlook and improved reservoir levels that augur well for the rabi season. Urban demand is on an upswing, reflected in growing discretionary spending. Investment activity has picked up, bolstered by healthier corporate and banking sector balance sheets, and greater capital outlays on infrastructure. While global headwinds may temper goods exports, Indias services exports are expected to stay resilient, helping mitigate external vulnerabilities.

Inflation dynamics have turned significantly more favourable. Headline inflation eased to 3.34% by March 2025, the lowest since 2019 due to a steep fall in food inflation, which moderated to 2.69%. Headline inflation dropped during January-February 2025, largely due to a sharp decline in food inflation. The inflation outlook has turned more favourable, driven by record wheat output, improved pulse production, and strong kharif arrivals, all helping to stabilise prices. The fall in crude oil prices further supports this trend. Short-term inflation expectations, based on surveys, dropped significantly.

As a result, the RBI lowered the policy repo rate by 25 basis points, signalling a pivot in monetary policy towards supporting growth. Despite all these improvements, downside risks persist due to lingering global volatility and the potential for weather-related supply disruptions.

The Indian economy approaches the remainder of 2025 with endurance and cautious optimism, even as the global environment remains clouded by uncertainty. Even in this challenging scenario, Indias macroeconomic fundamentals continue to offer stability and room for calibrated policy action. Moving forward, the focus will remain on fostering non-inflationary growth, driven by improving demand conditions, a stronger supply response, and continued policy support. With inflation pressures gradually easing and rural and urban consumption showing steady signs of revival, the conditions for a sustained recovery are becoming clearer. Monetary policy is expected to remain supportive of growth, while maintaining vigilance over inflation dynamics. The aim is to ensure that Indias growth momentum is preserved without compromising on price stability.

Crop protection is an essential part of modern agriculture. It involves the use of chemical and biological solutions to shield crops from pests, weeds, and diseases that can severely impact yield and quality. As farming intensifies to meet the growing food needs of the worlds population, these solutions are becoming increasingly indispensable in ensuring food security, farm profitability and environmental sustainability.

In 2024, the global crop protection chemicals market was valued at around US$ 96.05 Bn. The IMARC Group projects steady growth, with the market further expected to reach approximately US$ 141.69 Bn by 2033. This signifies a compound annual growth rate (CAGR) of 3.96% between 2024 and 2033.

Several key trends are fuelling this growth. The most significant is the pressure created by a rising global population. The United Nations (UN) projects the global population to rise from 8.2 Bn in 2024 to 9.7 Bn by 2050. Additionally, arable lands are becoming scarcer, and soil quality is deteriorating in many parts of the world. As a result, farmers are under increasing pressure to produce more with fewer resources. Crop protection products support this need by minimising losses and enhancing productivity per acre.

Climate change also plays a crucial role. It has led to more frequent and severe pest and disease outbreaks, which are harder to predict and manage using traditional practices. Consequently, the demand for effective and efficient crop protection products continues to rise. In particular, genetically modified (GM) crops that require specific herbicides are contributing to increased use in several regions. On the technology front, the sector continues to advance with promising developments. Advancements in formulation science, precision farming, and integrated pest management (IPM) are making products safer, more targeted and more sustainable. Farmers are becoming more aware of these benefits, especially as governments provide greater support through subsidies, training, and investment in agricultural research.

At the same time, consumer preferences are evolving. There is a growing demand for organic and residue-free produce, prompting manufacturers to develop newer, bio-based solutions that ensure effectiveness and environmental safety. Furthermore, stringent regulatory frameworks in many countries are steering the industry towards more sustainable innovation.

The global herbicides market has grown considerably in recent years and is poised to expand further. In 2024, it was estimated at US$ 47.38 Bn. With a CAGR of 14.9%, the market is expected to reach US$ 54.42 Bn by 2025. This rapid surge is largely due to the widespread adoption of conventional agriculture, an increase in cropland, the advent of glyphosate, and the rise of GM crops.

Looking ahead, the herbicides market is expected to maintain its upward trajectory. By 2029, the market is forecasted to reach US$ 82.45 Bn, clocking in a CAGR of 10.9%. A rising global population, weed resistance needs, and the increasing adoption of precision agriculture will drive this growth. Additionally, organic and sustainable farming practices are expected to play a significant role in shaping the markets future.

Key trends in the forecast period include a focus on sustainable weed management, advancements in precision application technologies, and the growing popularity of biological herbicides. Moreover, there is an increasing demand for organic and non-GMO herbicides as consumers and farmers seek environmentally friendly and health-conscious alternatives.

The herbicides market is also benefitting from the growing frequency of pest outbreaks. These sudden infestations pose a serious threat to crop yields, prompting farmers to seek integrated solutions. As a result, herbicides that address both weed and pest challenges are seeing greater uptake, reinforcing their critical role in modern agriculture.

In 2023, the global insecticides market was valued at US$ 18.2 Bn. It is projected to register a CAGR of 5.5% from 2024 to 2034, reaching approximately US$ 32.8 Bn by the end of the forecast period. This growth is driven by the increasing demand for food, propelled by a rising global population and rapid urbanisation. With climate change and geopolitical uncertainties exacerbating pressures on global food supply chains, there is a pressing need to improve crop yields despite limited resources. In this scenario, insecticides play a vital role in helping farmers combat pest-related losses, thereby contributing to strengthened food security worldwide.

Technological advancements in pest management and the evolution of integrated pest control strategies are supporting market expansion. The rising demand for eco-friendly insect repellents, particularly those using biological agents, reflects a global shift towards more sustainable and environmentally conscious agricultural practices. In response, leading market players are developing diverse and innovative insecticide solutions aimed at enhancing both crop quality and yield. Parallelly, companies are entering into strategic partnerships and collaborations to tap into new markets and extend their global footprint, further accelerating revenue growth within the insecticides sector.

The global fungicides market is expected to witness healthy growth over the coming years. It is projected to rise from US$ 23.9 Bn in 2024 to approximately US$ 32.3 Bn by 2029, recording a steady CAGR of 6.2% during the forecast period.

This growth primarily results from the need for higher farm productivity to meet the food demands of a growing global population. With intensified farming activities and climate variability becoming more pronounced, the incidence and spread of fungal diseases have widened. This has made fungicides an essential part of crop protection. Innovations in fungicide formulations and application technologies have helped improve their effectiveness and ease of use. Meanwhile, the shift towards sustainable agriculture and the rise in farming activities in developing regions are expanding market opportunities. These trends are driving demand for advanced and broad-spectrum fungicide solutions that offer both efficiency and environmental compatibility.

The bio-based chemicals market is growing steadily as concerns over the environment and fossil fuel depletion intensify. With industries transitioning towards more sustainable practices, materials sourced from biological resources such as plants, crops, agricultural waste, and microorganisms are gaining traction. Chemicals based on these materials are typically produced through processes like fermentation and enzymatic conversion, offering a renewable and environmentally responsible alternative to conventional petroleum-based products.

What sets bio-based chemicals apart is their role in cutting carbon emissions. They support the shift to circular, low-carbon economies without compromising industrial needs. Their rise is also shaped by the growing application of ‘green chemistry and policy-level pushes for safer, eco-friendly materials.

As sustainability moves from ambition to necessity, this market is well-placed to deliver practical, cleaner solutions that meet the evolving requirements of modern industries and conscious consumers.

The European crop protection pesticides market was valued at US$ 30.62 Bn in 2023 and is expected to grow to US$ 47.91 Bn by 2032, registering a CAGR of 5.1% from 2024 to 2032. Stricter regulations and the need for better crop yields and food safety are driving the markets growth. Additionally, consumers in developed regions are increasingly demanding organic and natural foods. This is boosting the use of biopesticides. However, limited credit access for farmers and high R&D costs for synthetic pesticides remain key challenges.

The crop protection chemicals market in North America is estimated at US$ 25.75 Bn in 2025 and is expected to reach US$ 32.07 Bn by 2030, growing at a CAGR of 4.48% during the forecast period. The region is steadily shifting towards integrated and sustainable crop protection practices. Its diverse agricultural output includes wheat, corn, soybeans, canola, fruits, and vegetables, making it vulnerable to a wide range of pests and diseases. Weed-related losses alone cost an estimated US$ 51.1 Bn annually, accelerating the adoption of advanced pest management practices that combine chemical controls and precision farming technologies. These practices aim to protect yields, while supporting long-term agricultural resilience.

The Asia-Pacific (APAC) crop protection market is expected to grow from US$ 15.5 Bn in 2024 to US$ 18.8 Bn by 2029, contributing 25.2% to the global markets incremental growth during this period. The regions large and growing population is driving agricultural intensification. This increases the need for effective crop protection solutions to improve yields. APACs varied climates and wide crop variety require customised approaches to combat a broad range of pests and diseases. Rising incomes and demand for high-quality food are further pushing the adoption of modern pesticides, herbicides, and fungicides. With ongoing pest pressures and economic momentum, APAC remains a key market for global crop protection solutions.

In the Middle East and Africa (MEA), the crop protection chemicals market is expected to grow from US$ 3.0 Bn in 2024 to US$ 3.9 Bn by 2029, contributing 6.9% to the incremental growth of the global market during this period.

Rising demand for agricultural productivity, despite water scarcity and arid conditions, will drive regional growth. Additionally, governments and farmers are investing in more efficient crop management practices, including the use of targeted chemical solutions to protect yields. Population growth and rising food demand are also contributing factors. Furthermore, increasing investment in modern farming technologies is expected to boost the use of pesticides, herbicides, and fungicides across major agricultural zones in MEA.

The global crop protection market is set for steady expansion across regions, supported by rising food demand, evolving farming practices, and increasing pest and disease pressures. Technological advancements, greater emphasis on sustainable solutions, and shifting consumer preferences for safer, high-quality produce are accelerating the use of crop protection chemicals. While each region presents unique challenges, the overall outlook remains positive with broad-based growth driven by the need for higher yields and agricultural resilience.