Executive Summary:
This document outlines the Indian government's initiatives to boost indigenous fertilizer production and reduce import dependence. It details steps taken regarding potash reserves, ammonium nitrate production, and the promotion of green fertilizers and insecticides. Key actions include amendments to mining regulations, subsidy schemes, and research and development funding, with ongoing auctions for strategic minerals.
Key Points / Main Content:
Potash Production:
* Potassic minerals are classified as Critical and Strategic Minerals under the MMDR Act, 2023, to enhance domestic production.
* The Central Government has commenced auctions of mineral blocks for strategic minerals; 7 Glauconite Potassic mineral blocks have been successfully auctioned as of 24.07.2025.
* Potash Derived from Molasses (PDM) is promoted as an alternative to imported Muriate of Potash (MOP) and is subsidized under the Nutrient Based Subsidy scheme at Rs. 345 per tonne for 2024-25.
Ammonium Nitrate Production:
* The chemical sector is broadly deregulated; Ammonium Nitrate manufacturing is regulated by Ammonium Nitrate Rules, 2012, with licenses issued by PESO based on DPIIT's Industrial Licenses.
* Basic Custom Duty (BCD) on Ammonium Nitrate increased from 7.5% to 10% in Budget 2024-25.
* The Directorate General of Trade Remedies (DGTR) provides a platform against unfair trade practices; currently, there are no pending applications for import barriers on Ammonium Nitrate.
Green Fertilizers and Insecticides:
* The government approved Market Development Assistance (MDA) of Rs. 1500/MT to promote organic fertilizers under the GOBARdhan initiative, with a total outlay of Rs. 1451.84 crore from FY 2023-24 to 2025-26, including Rs. 360 crore for research.
* The Institute of Pesticides Formulation and Technology supports greener technologies and new pesticide formulations.
* The UNIDO FARM project, undertaken by HIL India Ltd., aims to detoxify agriculture by promoting biopesticides like Btk, Neem, and Trichoderma spp.
Impact Analysis:
Fertilizer Manufacturers:
* Impact: Opportunity to increase domestic production and benefit from subsidies and protective measures.
* Action Required: Monitor policy changes, participate in auctions for mineral blocks, and explore manufacturing opportunities for PDM and Ammonium Nitrate.
Farmers:
* Impact: Access to subsidized PDM as an alternative potash source and promotion of organic fertilizers and biopesticides.
* Action Required: Adopt PDM in place of MOP, utilize organic fertilizers and biopesticides, and take advantage of government schemes.
Mining Sector:
* Impact: Increased investment and activity in the exploration and production of critical and strategic minerals.
* Action Required: Participate in mineral block auctions and adhere to sustainable mineral management practices.
Research and Development Institutions:
* Impact: Funding and support for developing green fertilizers and insecticides.
* Action Required: Engage in research projects to develop and promote environmentally friendly alternatives and utilize available funding.
Government Agencies:
* Impact: Implementation and monitoring of policies related to fertilizer production, import, and promotion of sustainable practices.
* Action Required: Enforce regulations, conduct auctions, administer subsidy schemes, and oversee research and development projects.
Key Entities Referenced
Ministry of Chemicals and Fertilizers: A ministry of the Government of India responsible for the development of the chemicals and fertilizers industries in India.
MMDR Act, 2023: The Mines and Minerals (Development and Regulation) Amendment Act, 2023, aims to enhance domestic production and achieve self-sufficiency in critical minerals.
Ammonium Nitrate Rules, 2012: Regulations governing the manufacturing, import, export, transportation, and storage of Ammonium Nitrate in India.
Petroleum and Explosives Safety Organisation PESO: The organization responsible for issuing licenses for the manufacture, storage, transportation, import, and export of Ammonium Nitrate under the Ammonium Nitrate Rules, 2012.
Directorate General of Trade Remedies DGTR: A department under the Department of Commerce that provides a level playing field to the domestic industry against unfair trade practices.
Russia: Country from which cheap imports of Ammonium Nitrate are a concern.
GOBARdhan initiative: An initiative promoting organic fertilizers through manure production at plants supported by various Biogas-CBG schemes.
HIL India Ltd.: An organization undertaking the UNIDO FARM Financing Agrochemical Reduction and Management Project to detoxify the agriculture sector.
GOVERNMENT OF INDIA
MINISTRY OF CHEMICALS AND FERTILIZERS
DEPARTMENT OF FERTILIZERS
LOK SABHA
UNSTARRED QUESTION NO. 2227 TO BE ANSWERED ON: 01.08.2025
Indigenous Production of Fertilizers
2227. SHRI RAMASAHAYAM RAGHURAM REDDY:
Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:
a. the steps undertaken by the Government to develop indigenous reserves of
potash so as to reduce the dependence on imports;
b. the steps taken to ramp up the production of Ammonium Nitrate in order to
reduce the dependence on imports;
c. whether the Government plans to offer protection in terms of subsidies or
import barriers in order to provide support to indigenous manufacturers of
Ammonium Nitrate against cheap imports, particularly from Russia, if so
details thereof; and
d. whether the Government has a blueprint to promote research and
development for development of green fertilizers and insecticides, if so, the
details thereof?
ANSWER
MINISTER OF STATE FOR CHEMICALS & FERTILIZERS
(SMT. ANUPRIYA PATEL)
(a): Potash and Glauconite(Potassic mineral) have been classified as Critical and
Strategic Minerals under “The Mines & Minerals (Development and Regulation)
Amendment (MMDR) Act, 2023” by Ministry of Mines which aims to enhance domestic
production and achieve self- sufficiency in critical minerals. MMDR Act, 1957 ensures
that critical minerals are produced, processed, and recycled by catalyzing investments
from governments and the private sector across the full value chain, emphasizing the-2-
importance of sustainable and responsible mineral management practices. The
Central Government has also commenced the auction of mineral blocks for critical &
strategic minerals as per provisions of MMDR Act, 1957. As on 24.07.2025, Ministry
of Mines have successfully auctioned 7 mineral blocks of Glauconite (Potassic
mineral).
Further, Potash Derived from Molasses (PDM) which is a by-product of sugar
industry, has minimum 14.5% potash and can be used by farmers in field as an
alternative to MOP (Muriate of Potash with 60% potash content). Thus, PDM can
reduce the dependence on imported potash. PDM was notified under Fertilizer Control
Order (1985) in 2009, and in order to incentivize the use of PDM, it was inducted under
Nutrient Based Subsidy scheme since Rabi, 2022. During 2024-25, Rs. 345 per tonne
of subsidy has been fixed for PDM.
(b): Chemical sector is broadly de-regulated and delicensed sector. The
manufacturing, import, export, transportation etc. of Ammonium Nitrate are being
regulated by Ammonium Nitrate Rules, 2012. Petroleum and Explosives Safety
Organisation (PESO) issues licenses for manufacture, storage, transportation, import
and export of Ammonium Nitrate under these rules. The licenses for manufacturing of
Ammonium Nitrate are issued based on Industrial Licenses issued by Department of
Promotion of Industry & Internal Trade (DPIIT).
(c): In Budget 2024-25, Basic Custom Duty (BCD) on Ammonium Nitrate increased
from 7.5% to 10% to support existing and new capacities in pipeline. Directorate
General of Trade Remedies (DGTR), Department of Commerce provides a level
playing platform to the domestic industry against the adverse impact of the unfair trade
practices viz. dumping, actionable subsidies, circumvention etc. from any exporting
country by using effective Trade Remedial measures such as anti-dumping and
safeguard measures. However, currently, there are no pending applications seeking
protection in terms of import barriers like anti-dumping duty or countervailing duty/anti-
subsidy duty on Ammonium Nitrate.
(d): The Government has approved the Market Development Assistance (MDA) @
Rs. 1500/MT to promote organic fertilizers, i.e. manure produced at plants under-3-
GOBARdhan initiative covering different Biogas/CBG support schemes/programmes
of stakeholder Ministries/Departments such as Sustainable Alternative Towards
Affordable Transportation (SATAT) scheme of Ministry of Petroleum and Natural Gas
(MoPNG), ‘Waste to Energy’ programme of Ministry of New & Renewable Energy
(MNRE), Swachh Bharat Mission (Rural) of Department of Drinking Water & Sanitation
(DDWS), etc. with total outlay of Rs. 1451.84 crore (FY 2023-24 to 2025-26), which
includes a corpus of Rs. 360 crore for research gap funding, etc.
Further, Institute of Pesticides Formulation and Technology works on supporting
adoption of greener technologies and development of user & environment friendly new
pesticide formulations. UNIDO FARM (Financing Agrochemical Reduction and
Management) Project undertaken by HIL (India) Ltd. to detoxify the agriculture sector
by eliminating the use of highly hazardous pesticides and Persistent Organic
Pollutants. The project focuses on three types of bio-pesticides: Btk (Bacillus
thuringiensis kurstaki), Neem, and Trichoderma spp. Btk, a strain of the bacterium
Bacillus thuringiensis, which is effective for controlling caterpillar pests, while Neem
controls a wide range of insect pests. Trichoderma provides effective control against
soil-borne fungal diseases and enhances plant growth.
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