Executive Summary:
The Ministry of Chemicals and Fertilizers addresses steps taken to enhance self-reliance in fertilizer production, particularly urea, over the last five years. The government incentivized domestic production through policies like NIP 2012 and NUP 2015, leading to increased urea capacity and production. While self-sufficiency is the goal, imports continue to bridge the gap between domestic production and consumption.
Key Points / Main Content:
Urea Production Enhancement:
* New Investment Policy (NIP) 2012 (amended in 2014) facilitated investment in the urea sector, leading to the establishment of six new urea units (four JVC, two private).
* These units added 76.2 LMTPA, increasing indigenous urea production capacity (RAC) from 207.54 LMTPA (2014-15) to 283.74 LMTPA (2023-24).
* The Talcher unit revival was approved via a JVC, establishing a 12.7 LMTPA Greenfield urea plant using coal gasification.
* A new Brownfield Ammonia-Urea Complex of 12.7 LMT annual capacity was approved for Brahmaputra Valley Fertilizer Corporation Limited (BVFCL) in Assam.
* New Urea Policy (NUP) 2015 for 25 gas-based urea units aimed to maximize indigenous urea production, leading to additional production of urea by 20-25 LMT annually.
* Urea production increased from 225 LMT (2014-15) to 314.07 LMT (2023-24). In 2024-25, 306.67 LMT of Urea was produced.
Phosphatic and Potassic (PK) Fertilizers:
* Nutrient Based Subsidy (NBS) Policy, effective 01.04.2010, provides a fixed subsidy on notified PK fertilizers based on nutrient content.
* PK fertilizers are covered under Open General License (OGL), allowing companies to import as per business dynamics.
* New manufacturing units or capacity increases of existing units have been recognized under the NBS subsidy scheme.
* The number of PK fertilizers covered under NBS policy increased from 22 grades in 2021 to 28 grades.
* Freight Subsidy on SSP is applicable since Kharif, 2022, to promote SSP usage.
Fertilizer Supply and Monitoring:
* Fertilizer plant setup is based on viability, not consumption trends.
* The Department of Agriculture and Farmers Welfare (DAFW) assesses state-wise, month-wise fertilizer requirements.
* The Department of Fertilizers allocates adequate quantities to states via monthly supply plans, met through indigenous production and imports.
* The integrated Fertilizer Monitoring System (iFMS) monitors the movement of major subsidized fertilizers.
Fertilizer Production, Consumption, and Import Data:
* The following data is provided in LMT.
* Urea Production: 284.94 (2022-23), 314.07 (2023-24), 306.67 (2024-25)
* Urea Consumption: 357.26 (2022-23), 357.81 (2023-24), 387.92 (2024-25)
* Urea Import: 75.80 (2022-23), 70.42 (2023-24), 56.47 (2024-25)
* PK Production: 200.35 (2022-23), 189.26 (2023-24), 211.21 (2024-25)
* PK Consumption: 279.12 (2022-23), 288.42 (2023-24), 317.31 (2024-25)
* PK Import: 112.01 (2022-23), 106.53 (2023-24), 103.82 (2024-25)
Impact Analysis:
Fertilizer Companies:
* Impact: Encouraged to increase domestic production of urea and PK fertilizers. May benefit from subsidies and OGL for imports.
* Action Required: Assess business dynamics to determine import quantities and evaluate opportunities to establish or expand domestic production facilities to take advantage of available policies and subsidies.
Farmers:
* Impact: Benefit from increased availability of fertilizers through both domestic production and imports.
* Action Required: Monitor fertilizer availability and prices, and utilize SSP fertilizer to provide Phosphatic nutrients to the soil.
State Governments:
* Impact: Responsible for assessing fertilizer requirements and coordinating with the central government for supply.
* Action Required: Accurately assess fertilizer needs and coordinate with the Department of Fertilizers to ensure adequate supply through monthly supply plans.
Department of Agriculture and Farmers Welfare (DAFW):
* Impact: Responsible for assessing state-wise and month-wise fertilizer requirements.
* Action Required: Continue to accurately assess fertilizer needs and communicate these needs to the Department of Fertilizers.
Department of Fertilizers:
* Impact: Oversees fertilizer production, import, and distribution to ensure adequate supply across the country.
* Action Required: Continue to implement policies to promote domestic production, manage imports, and monitor fertilizer movement through the iFMS system.
Key Entities Referenced
Ministry of Chemicals and Fertilizers: A government ministry responsible for the chemicals and fertilizers sector in India.
New Investment Policy NIP 2012: A policy announced by the Government of India on 2nd January 2013, and amended on 7th October 2014, to facilitate fresh investment in the urea sector.
Ramagundam Fertilizers and Chemicals Ltd RFCL in Telangana: A joint venture company (JVC) that set up a urea unit in Ramagundam, Telangana.
Hindustan Urvarak Rasayan Limited HURL in Uttar Pradesh, Jharkhand and Bihar: A joint venture company (JVC) that set up three urea units in Gorakhpur (Uttar Pradesh), Sindri (Jharkhand) and Barauni (Bihar).
Matix Fertilizers and Chemicals Ltd. Matix in West Bengal: A private company that set up a urea unit in Panagarh, West Bengal.
Chambal Fertilizers and Chemicals Ltd. CFCL in Rajasthan: A private company that set up a urea unit in Gadepan, Rajasthan.
Talcher Fertilizers Limited TFL: A joint venture company (JVC) responsible for the revival of the Talcher unit of FCIL through a new Greenfield urea plant.
Nutrient Based Subsidy NBS Policy: A policy implemented by the Government of India w.e.f. 01.04.2010 for Phosphatic and Potassic (PK) Fertilizers, providing a fixed amount of subsidy on notified PK fertilizers based on their nutrient content.
GOVERNMENT OF INDIA
MINISTRY OF CHEMICALS & FERTILIZERS
DEPARTMENT OF FERTILIZERS
LOK SABHA
UNSTARRED QUESTION NO. 2265 TO BE ANSWERED ON: 01.08.2025
Self-Reliance in Production of Fertilizers
†2265. SHRI RAJESH RANJAN:
Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:
(a) the steps taken by the Government to become self-reliant in production of
fertilizers during the last five years;
(b) whether the Government proposes to set up fertilizer plant in States having higher
consumption of fertilizer like Bihar;
(c) whether the Government is disinclined to set up a fertilizer plants in the country
due to low cost of imported fertilizer; and
(d) if so, the details thereof?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF CHEMICALS & 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 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 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-2-
exclusive policy for the revival of Talcher unit of FCIL through JVC of nominated PSUs
namely Talcher Fertilizers Limited (TFL) by setting up 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 25th
May, 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 (NBS) 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. To become self-reliant in production of 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 increased from 22
grades in 2021 to 28 grades with a view to boost manufacturing and make country self-
reliant in fertilizer production.
(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): The setting up of fertilizer plant in a state is primarily based on the viability and
not on the consumption trend of fertilizers at that place. Before the commencement of
each cropping season, Department of Agriculture and Farmers Welfare (DA&FW)
assesses the State-wise & Month-wise requirement of fertilizers. To fulfil this-3-
requirement of fertilizers in the States as per the assessment done by DA&FW, D/o
Fertilizers allocates adequate quantities of fertilizers to the States by issuing monthly
supply plans. These supplies are met through indigenous production as well as
imports. The movement of all major subsidized fertilizers is monitored through web-
based monitoring system called integrated Fertilizer Monitoring System (iFMS).
(c & d): As stated at (a) above, the Government has taken various effective steps to
achieve self-sufficiency in the production of fertilizers in the country. However, the
indigenous production of fertilizers is not commensurate with the requirement in the
country and the gap is fulfilled through imports. The details of production, consumption
and imports of fertilizers during last three years are given below :-
(in LMT)
UREA
Year Production Consumption Import
2022-23 284.94 357.26 75.80
2023-24 314.07 357.81 70.42
2024-25 306.67 387.92 56.47
(in LMT)
P&K
Year Production Consumption Import
2022-23 200.35 279.12 112.01
2023-24 189.26 288.42 106.53
2024-25 211.21 317.31 103.82
***