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Dated: 29.03.2025

India’s New Investment Policy Boosts Urea Production, Aiming for Self-Sufficiency

The Government has effectively implemented the New Investment Policy (NIP) – 2012, along with its 2014 amendment, to encourage fresh investments in the urea manufacturing sector. As a result, six new urea production units have been successfully established, significantly increasing the country’s total urea production capacity.

Overview of the New Investment Policy (NIP)

The NIP-2012, announced on 2nd January 2013 and amended on 7th October 2014, was designed to attract investments and modernize India’s urea sector. The policy incentivizes the establishment of energy-efficient and high-capacity urea plants through both public sector undertakings (PSUs) and private enterprises.

Key Achievements under NIP:

• Total New Urea Units Commissioned: 6 units
  • 4 Units via Joint Venture Companies (JVCs) of nominated PSUs:
    • Ramagundam (Telangana) – Ramagundam Fertilizers and Chemicals Ltd (RFCL)
• • • Gorakhpur (Uttar Pradesh) – Hindustan Urvarak & Rasayan Limited (HURL)
• • • Sindri (Jharkhand) – HURL
• • • Barauni (Bihar) – HURL
• 2 Units by Private Sector:
• Gadepan-III (Rajasthan) – Chambal Fertilizers and Chemicals Ltd (CFCL)

• Installed Capacity: Each plant has a capacity of 12.7 Lakh Metric Tonnes Per Annum (LMTPA)
• Total Additional Capacity: 76.2 LMTPA added
• Overall Increase: India’s urea production capacity has increased from 207.54 LMTPA in 2014-15 to 283.74 LMTPA in 2023-24

Modern, Energy-Efficient Infrastructure

These newly established units are built using cutting-edge, energy-efficient technologies, which not only boost production but also support the sustainability goals of the country’s fertilizer sector.

Nutrient Based Subsidy Policy for P&K Fertilizers

Alongside the NIP, the Government is also operating the Nutrient Based Subsidy (NBS) Policy for Phosphatic and Potassic (P&K) fertilizers since 1st April 2010. Under this policy:

• A fixed subsidy is provided per nutrient content, revised annually or bi-annually.
• The P&K sector is decontrolled, allowing fertilizer companies to set their Maximum Retail Price (MRP) based on market dynamics.
• Companies are free to import or manufacture fertilizers and invest in infrastructure as per market conditions.

Government’s Vision and Impact

The policy aims to:

• Make India self-sufficient in urea production.
• Reduce dependency on imports.
• Promote public-private partnership in core sectors.
• Ensure consistent supply of affordable fertilizers to farmers.

The Union Minister of State for Chemicals and Fertilizers, in a written response to a parliamentary question.

Conclusion

The implementation of the New Investment Policy (NIP) marks a transformative step towards strengthening India’s fertilizer security and reducing import reliance. As these new units come online with high-capacity and energy-efficient production systems, they pave the way for a more sustainable, secure, and self-reliant agricultural economy.

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Source: PIB, Govt of India

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