Lok Sabha Question No. 1110 (UNSTARRED), answered on 2016-11-22
Subject: Investment in Fertilizer Industry
Ministry: CHEMICALS AND FERTILIZERS
Asked by: JAGDAMBIKA PAL

## GOVERNMENT OF INDIA MINISTRY OF CHEMICALS & FERTILIZERS DEPARTMENT OF FERTILIZERS

## LOK SABHA

UNSTARRED QUESTION NO. 1110

TO BE ANSWERED

ON: 22.11.2016

## INVESTMENT IN FERTILIZER INDUSTRY

## 1110   SHRI JAGDAMBIKA PAL:

Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:

- (a) whether the fertilizer  industry  has been  unable  to  attract  investment  during  the last few years and if so, the reasons therefor;
- (b) whether  the  Government  has  framed  any  pricing  policy  for  sale  of  fertilizers and if so, the details thereof; and
- (c) the  target  fixed  for  the  production  of  fertilizers  in  the  next  five  years  and  the steps being taken to achieve the said target?

## ANSWER

MINISTER  OF  STATE  IN  THE  MINISTRY  OF  CHEMICALS  &  FERTILIZERS  AND SHIPPING, ROAD TRANSPORT & HIGHWAYS

(SHRI MANSUKH L. MANDAVIYA)

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(a): The Government has notified New Investment Policy - 2012 on 2 nd January, 2013 and its amendment on 7 th October 2014 to facilitate fresh investment in urea sector and to make India self-sufficient in the urea sector.

|   S.No. | Company                                         | Projects                                                            | Ownership   | State         |
|---------|-------------------------------------------------|---------------------------------------------------------------------|-------------|---------------|
|       1 | Indo-Gulf Fertilizers Limited - Jagdishpur      | Brownfield Expansion urea project at Jagdishpur.                    | Private     | Uttar Pradesh |
|       2 | Chambal Fertilizers & Chemicals Limited-Gadepan | Brownfield Ammonia- Urea units at Gadepan- Kota.                    | Private     | Rajasthan     |
|       3 | Matix Fertilizers & Chemicals Limited, Panagarh | Greenfield/Brownfield Ammonia-Urea Fertilizers Complex at Panagarh. | Private     | West Bengal   |

|   4 | Rashtriya Chemicals & Fertilizers Limited- Thal   | Brownfield Ammonia- Urea Expansion project at Thal.   | CPSU    | Maharashtra    |
|-----|---------------------------------------------------|-------------------------------------------------------|---------|----------------|
|   5 | Kanpur Fertilizers & Cement Limited               | Greenfield Project at Jabalpur                        | Private | Madhya Pradesh |
|   6 | Nagarjuna Fertilizers & Chemicals Ltd.            | Brownfield Project at Kakinada, Andhra Pradesh.       | Private | Andhra Pradesh |

At  present,  there  are  following  proposals  for  setting  up  of  Greenfield/Brownfield projects with the Department of Fertilizers:

The country has very little reserves of fertilizer raw material and natural gas in the  country.  There  is  no  known  source  of  potash  reserves  in  the  country  and  for phosphate the country depends on imports for its 90% requirement. Natural gas in the country is scarce and the domestic gas allocated for fertilizer sector has been allocated exclusively  for  Urea.  Production  of  ammonia  required  for  producing  P&K  fertilizers through imported RLNG is very costly as compared to imported ammonia. Under the above conditions, indigenous production of P&K fertilizers is not always viable. Hence, P&K fertilizer industry except SSP industry is unable to attract investment.

However,  a  large  number  of  SSP  units  have  come  up  after  NBS  policy.  The number of SSP units has increased from 73 in 2008-09 to 100 in 2014-15. Even the production  of  SSP  has  also  increased  from  25.34  LMT  in  2008-09  to  42.14  LMT  in 2014-15.

(b):     The MRP of urea is statutorily controlled by the Government and at present it is Rs.5360 per tone (exclusive of the central excise duty, central sales tax, countervailing duty,  the  sales  tax  and  other  local  taxes  wherever  levied)  w.e.f.  01 st November, 2012.The  difference  between  the  delivered  cost  of  fertilizers  at  farm  gate  and  MRP payable by the farmer is given as subsidy to the fertilizer manufacturer/importer by the Government of India.

The Government is implementing Nutrient Based Subsidy Policy w.e.f. 1.4.2010 for  Phosphatic  and  Potassic  (P&K)  Fertilizers.   Under  the  policy,  a  fixed  amount  of subsidy, decided on annual basis, is provided on subsidised P&K fertilizers depending on their nutrient content and the fertilizer companies have been allowed to fix MRP at reasonable level

(c):     The target fixed for the current year 2016-17 of major Fertilizers are as under:

|   Sl. No. | Product Name   |   Target (in LMT) |
|-----------|----------------|-------------------|
|         1 | Urea           |            242.3  |
|         2 | DAP            |             46    |
|         3 | Complexes      |             93.27 |

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