Lok Sabha Question No. 2024 (UNSTARRED), answered on 2017-03-14
Subject: Investment in Fertilizer Sector
Ministry: CHEMICALS AND FERTILIZERS
Asked by: JAGDAMBIKA PAL

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

## LOK SABHA

UNSTARRED QUESTION NO. 2024

TO BE ANSWERED ON :

14.03.2017

Investment in Fertilizer Sector

## 2024    SHRI JAGDAMBIKA PAL:

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

- (a): whether the fertilizer sector has not been successful in attracting investment for the sector in recent past;
- (b): if so, the reasons therefor;
- (c): whether  the  Government  has  prepared  any  pricing  policy  for  the  sale  of fertilizers; and
- (d): if so, the details thereof?

## ANSWER

MINISTER OF STATE FOR ROAD TRANSPORT & HIGHWAYS, SHIPPING AND CHEMICALS & FERTILIZERS

(SHRI MANSUKH L.  MANDAVIYA)

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(a)  &  (b):  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.

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

|   Sl. 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 hemicals & 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 ertilizers & Chemicals Ltd.            | Brownfield Project at Kakinada, Andhra Pradesh.       | Private | Andhra Pradesh |

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  108  in  2016-17.  The production of SSP has also increased from 25.34 LMT in 2008-09 to 43.38 LMT in 2015-16.

(c) & (d): The Maximum Retail Price (MRP) of urea is statutorily controlled by the Government and at present, it is Rs. 5360 per tonne (exclusive of the central excise duty,  central  sales  tax,  countervailing  duty,  the  state  tax  and  other  local  taxes wherever levied) w.e.f. 01 st November, 2012.  The difference between the delivered cost of urea at farm gate and MRP payable by the farmer is given as subsidy to the urea 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.

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