Executive Summary:
The Ministry of Chemicals and Fertilizers addresses questions regarding India's self-reliance in fertilizer production. The response details strategies to reduce dependence on imported urea and DAP, scale up green and biofertilizer alternatives, support fertilizer manufacturing modernization, and address fertilizer subsidies. The New Investment Policy (NIP) 2012 and New Urea Policy (NUP) 2015 are central to these efforts.
Key Points / Main Content:
* **Urea Self-Sufficiency:**
* New Investment Policy (NIP) 2012 and its amendment facilitate investments in the urea sector.
* Six new urea units established under NIP 2012, including four Joint Venture Companies (JVC) and two private companies, adding 76.2 LMTPA production capacity.
* Revival of Talcher unit via JVC and a new Brownfield Ammonia-Urea Complex at Brahmaputra Valley Fertilizer Corporation Limited (BVFCL) approved.
* New Urea Policy (NUP) 2015 aims to maximize indigenous urea production, leading to additional production of urea by 2025 LMT annually.
* Urea production increased from 225 LMT in 2014-15 to 314.07 LMT in 2023-24, with 306.67 LMT produced in 2024-25.
* **Phosphatic and Potassic (PK) Fertilizers:**
* Nutrient Based Subsidy (NBS) Policy implemented since 01.04.2010 provides a fixed subsidy on PK fertilizers based on nutrient content.
* New manufacturing units and capacity increases recognized under the NBS subsidy scheme.
* The number of PK fertilizers covered under NBS increased from 22 to 28 grades.
* Freight Subsidy on SSP is applicable since Kharif, 2022.
* **Green and Biofertilizer Alternatives (PMPRANAM):**
* "PM Programme for Restoration, Awareness Generation, Nourishment, and Amelioration of MotherEarth" (PMPRANAM) promotes sustainable fertilizer use, alternate fertilizers, organic farming, and resource conservation.
* States/UTs receive grants based on savings from reduced chemical fertilizer consumption.
* Market Development Assistance (MDA) provides Rs. 1500/MT to promote soil carbon enhancers and organic fertilizers from Compressed Bio Gas (CBG) plants.
* **Fertilizer Manufacturing Modernization:**
* NIP 2012 facilitates fresh investment in the urea sector.
* New urea plants established with modern technology for lower energy consumption.
* New Urea Policy (NUP) 2015 sets Target Energy Norms (TEN) for urea units, leading to technological upgrades.
* Energy consumption of urea plants improved from 6.04 Gcal/MT in 2014-15 to around 5.56 Gcal/MT in 2024-25.
* **Fertilizer Subsidies:**
* Urea is provided to farmers at a subsidized Maximum Retail Price (MRP) of Rs. 242 per 45 kg bag.
* The difference between the delivered cost and net market realization is given as a subsidy to manufacturers/importers.
* NBS Policy announces a fixed rate of subsidy per kg based on nutrient content, independent of production cost.
Impact Analysis:
* Farmers:
* Impact: Access to subsidized urea and PK fertilizers, promotion of balanced fertilization and soil health.
* Action Required: Adopt recommended fertilizer practices and utilize available subsidies.
* Fertilizer Manufacturers/Importers:
* Impact: Opportunities for investment, capacity expansion, and technology upgrades; receipt of subsidies based on production and nutrient content.
* Action Required: Comply with NIP 2012 and NUP 2015 guidelines, adopt energy-efficient technologies, and adhere to NBS policy.
* States/Union Territories:
* Impact: Financial incentives for promoting sustainable fertilizer use and reducing chemical fertilizer consumption.
* Action Required: Implement PMPRANAM scheme, promote organic farming, and monitor fertilizer consumption.
* General Public/Environment:
* Impact: Reduced dependence on imports, promotion of sustainable agriculture, improved soil health, and reduced environmental impact.
* Action Required: Support initiatives for sustainable agriculture and responsible fertilizer use.
Key Entities Referenced
Urea: A nitrogen-based fertilizer, heavily subsidized and regulated by the Government of India.
DAP: Diammonium Phosphate, a phosphatic fertilizer, India aims to reduce import dependence.
PMPRANAM: PM Programme for Restoration, Awareness Generation, Nourishment, and Amelioration of Mother Earth, a scheme promoting sustainable fertilizer use and organic farming.
New Investment Policy NIP 2012: A policy announced by the Government of India on 2nd January, 2013 and its amendment on 7th October, 2014 to encourage investment in the urea sector.
Hindustan Urvarak Rasayan Limited HURL: A Joint Venture Company involved in setting up urea units in Gorakhpur, Uttar Pradesh; Sindri, Jharkhand; and Barauni, Bihar.
Nutrient Based Subsidy Policy: A policy implemented w.e.f. 01.04.2010 that provides a fixed amount of subsidy on Phosphatic and Potassic (PK) fertilizers based on their nutrient content.
New Urea Policy NUP 2015: A policy notified on 25th May, 2015 for existing gas-based urea units, aiming to maximize indigenous urea production.
Telangana: State in India where Ramagundam urea unit of Ramagundam Fertilizers and Chemicals Ltd RFCL is located
GOVERNMENT OF INDIA
MINISTRY OF CHEMICALS AND FERTILIZERS
DEPARTMENT OF FERTILIZERS
LOK SABHA
UNSTARRED QUESTION No. 1058 TO BE ANSWERED ON 25.07.2025
Fertilizer Self-Reliance & Manufacturing Modernisation
1058: SHRI AMRINDER SINGH RAJA WARRING:
Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:
(a) whether the Government has formulated any strategy for reducing India’s
dependence on imported urea and DAP, if so, the details thereof;
(b) whether the production and use of green and bio-fertilizer alternatives are being
scaled up under PM-PRANAM or related schemes;
(c) whether any support is given to fertiliser manufacturing units for modernisation or
capacity expansion, if so, the details thereof; and
(d) whether there are any plans to link fertilizer subsidies to the cost of production to
protect farmers and farming sector facing challenges of high cost of production, if so,
the details thereof?
ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF CHEMICALS AND FERTILIZERS
(SMT. ANUPRIYA PATEL)
(a): With regard to Urea, the Government had announced New Investment Policy
(NIP) – 2012 on 2nd January, 2013 and its amendment on 7thOctober, 2014 to facilitate
fresh investment in the urea sector and to make India self-sufficient in the urea sector.
Total 6 new urea units have been set up under NIP-2012 which includes 4 urea units
set up through Joint Venture Companies (JVC) of nominated PSUs and 2 urea units set
up by the private companies. The units set up through JVC are Ramagundam urea unit
of Ramagundam Fertilizers and Chemicals Ltd (RFCL) in Telangana and 3 urea units
namely Gorakhpur, Sindri and Barauni of Hindustan Urvarak & Rasayan Limited (HURL)
in Uttar Pradesh, Jharkhand and Bihar, respectively. The units set up by private
companies are Panagarh urea unit of Matix Fertilizers and Chemicals Ltd. (Matix) in
West Bengal; and Gadepan-III urea unit of Chambal Fertilizers and Chemicals Ltd.
(CFCL) in Rajasthan. Each of these units has installed capacity of 12.7 Lakh Metric
Tonne per annum (LMTPA). These units are highly energy efficient as they are based
on latest technology. Therefore, these units have together added urea production
capacity of 76.2 LMTPA, thereby total indigenous urea production capacity (Reassessed
Capacity, RAC) has increased from 207.54 LMTPA during 2014-15 to 283.74 LMTPA
during 2023-24. Further, an exclusive policy for the revival of Talcher unit of FCIL
through JVC of nominated PSUs namely Talcher Fertilizers Limited (TFL) by setting up-2-
a new Greenfield urea plant of 12.7 LMTPA at coal gasification route has also been
approved. Recently, the Union Cabinet has approved the proposal for setting up of a
new Brownfield Ammonia-Urea Complex of 12.7 Lakh Metric Tonnes (LMT) annual
capacity of Urea production within the existing premises of Brahmaputra Valley Fertilizer
Corporation Limited (BVFCL), Namrup, Assam.
In addition, the Government also notified the New Urea Policy (NUP) – 2015 on
25thMay, 2015 for the existing 25 gas-based urea units with one of the objectives of
maximizing indigenous urea production beyond RAC. The NUP-2015 has led to
additional production of urea by 20-25 LMT as compared to the production during 2014-
15 annually.
Above steps together have facilitated increase of Urea production from level of 225 LMT
per annum during 2014-15 to a record Urea Production at 314.07 LMT during 2023-24.
During 2024-25, 306.67 LMT of Urea was produced in the country.
Government has implemented Nutrient Based Subsidy Policy w.e.f. 01.04.2010 for
Phosphatic and Potassic (P&K) Fertilizers. Under the policy, a fixed amount of subsidy,
decided on annual/bi-annual basis, is provided on notified P&K fertilizers depending on
their nutrient content. Under NBS policy, P&K fertilizers are covered under Open
General License (OGL) and companies are free to import these fertilizers as per their
business dynamics. However, to reduce reliance on imported phosphatic and potassic
fertilizers, following measures have been taken by the Government:
(i) Based on the requests, the new manufacturing units or increase in manufacturing
capacity of existing units have been recognized / taken on record under the NBS subsidy
scheme, with a view to boost manufacturing and make country self-reliant in fertilizer
production.
(ii) The number of P&K fertilizers covered under NBS policy has been increased from
22 grades in 2021 to 28 grades at present with a view to boost manufacturing and make
country self-reliant in fertilizer production. 06 new grades added are NPK 08-21-21, NPK
09-24-24, Potash Derived from Molasses (PDM) (0-0-14.5-0), NPK 11-30-14 fortified
with Magnesium, Zinc, Boron and Sulphur, Urea-SSP Complex 5-15-0-10 and SSP 0-
16-0-11 fortified with Magnesium, Zinc and Boron.
(iii) Freight Subsidy on SSP, which is an indigenously manufactured fertilizer, is
applicable since Kharif, 2022 to promote SSP usage for providing Phosphatic or 'P'
nutrient to the soil.
(b): PM Programme for Restoration, Awareness Generation, Nourishment, and
Amelioration of Mother-Earth" (PM-PRANAM) scheme aims to support the mass
movement started by States/UTs to save the health of Mother Earth by promoting
sustainable and balanced use of fertilizers, adopting alternate fertilizers, promoting-3-
organic farming and implementing resource conservation technologies. Under the
scheme, 50% of the fertilizer subsidy saved by a State/UT in a particular financial year
by way of reduction in consumption of chemical fertilizers (Urea, DAP, NPK, MOP)
compared to previous 3 years' average consumption, is passed on to that State/UT as
Grant.
Further, under Market Development Assistance (MDA) Scheme (FY 2023-24 to 2025-
26) assistance @ Rs. 1500/MT is provided to promote soil carbon enhancers viz.,
FOM/LFOM and organic fertilizer viz., PROM produced at Compressed Bio Gas (CBG)
plants under GOBARdhan initiative.
These initiatives of the Government are expected to address the imbalanced use of
chemical fertilizers thereby reducing chemical fertilizer use.
(c): The Government had announced New Investment Policy (NIP) – 2012 on 2nd
January, 2013 and its amendment on 7th October, 2014 to facilitate fresh investment in
the urea sector and to make India self-sufficient in the urea sector. Total 6 new urea
units have been set up under NIP-2012, with each having production capacity of 12.7
LMT per annum. Therefore, these units have together added urea production capacity
of 76.2 LMT per annum. These new urea plants have been established with
latest/modern technology designed for much lower energy consumption, around 5.0
Gcal/MT. With the objective of promoting energy efficiency and maximizing indigenous
urea production, New Urea Policy (NUP) - 2015 was made effective from 1st June 2015.
Under this policy, Target Energy Norms were given to the urea units. The urea units
were expected to achieve TEN for which the units have resorted to the latest
technological up gradation in the plants. Implementation of NUP-15 norms has resulted
in significantly improving energy consumption of Urea plants from 6.04 Gcal/MT during
2014-15 to around 5.56 Gcal/MT during 2024-25.
(d): Under Urea Subsidy Scheme, Urea is presently provided to the farmers at a
statutorily notified Maximum Retail Price (MRP). The MRP of 45 kg bag of urea is Rs.242
per bag (exclusive of charges towards neem coating and taxes as applicable). The
difference between the delivered cost of urea at farm gate and net market realization by
the urea units is given as subsidy to the urea manufacturer/importer by the Government
of India. Accordingly, all farmers of the country are supplied urea at the subsidized rates
and thereby are beneficiaries of this scheme.
Further, under the NBS Policy, the Government announces a fixed rate of subsidy (in
Rs. per Kg basis), based on nutrient content of the fertilizers, on annual/bi-annual basis.
The subsidy is calculated taking into account all relevant factors including international
prices, exchange rate, inventory level and prevailing Maximum Retail Prices of P&K
fertilizers and is independent of the cost of production.
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