UPL expects to gain market share and strengthen margins after the reduction in US reciprocal tariffs, which has significantly improved the competitiveness of Indian agrochemical exporters against Chinese suppliers. With India’s effective duties now sharply lower than China’s across several molecules, the company anticipates a positive earnings impact from the fourth quarter onward, said Bikash Prasad, Group CFO, UPL.
“The duty differential today will be about 27%. This allows us to compete against China in most molecules and will definitely help UPL for the rest of the fourth quarter as well as the year ahead,” Prasad said.
Tariff Differential Strengthens India’s Position
The tariff revision has reshaped the competitive landscape for agrochemical exporters.
Earlier, the US imposed:
*50% tariffs on India
*55% tariffs on China
After a 10% reduction linked to fentanyl-related duties, China’s effective tariff dropped to 45%. Meanwhile, India’s duty has fallen to 18%. If the proposed 25% penalty duty tied to Russian oil imports is removed, the overall duty gap could widen to nearly 27%, creating a clear pricing advantage for Indian manufacturers. While some molecules remain duty-exempt, others continue to attract tariffs. However, the overall structure now favours Indian suppliers in most generic agrochemical segments.
Pricing Stable, Margins Get Policy Support
Across the agrochemical industry, pricing has largely remained stable, with volume growth driving expansion. At the same time, China’s decision to withdraw a 9% export subsidy on certain active ingredients could offer additional margin support to Indian producers, especially in phosphorous-based products. Together, these changes may create favourable conditions for sustained profitability.
Outlook: Strong Q4 Momentum Expected
Looking ahead, UPL expects a robust fourth quarter, supported by multiple tailwinds:
*Deferred US sales
*Seasonal demand recovery in Brazil
*Continued traction in differentiated and sustainable products
Notably, these higher-value products now account for around 38% of group sales, reflecting the company’s ongoing portfolio shift. Despite outperforming its nine-month targets, UPL has maintained its full-year guidance, citing geopolitical and macroeconomic uncertainties. As reported by thehindubusinessline.com, still, with tariff advantages, stable pricing, and improving efficiencies, the company appears well-positioned to sustain growth in the coming quarters.
