Lok Sabha Question No. 3287 (UNSTARRED), answered on 2025-08-08
Subject: Initiative to Increase Fertilizers Production
Ministry: CHEMICALS AND FERTILIZERS
Asked by: Shri Bhartruhari Mahtab, Ms Kangna Ranaut, Shri Janardan Mishra, Shri Vishnu Dayal Ram, Smt. Kamaljeet Sehrawat

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

## LOK SABHA

UNSTARRED QUESTION NO. 3287 TO BE ANSWERED ON 08.08.2025

## Initiative to Increase Fertilizers Production

3287: SHRI VISHNU DAYAL RAM:

SMT. KAMALJEET SEHRAWAT:

MS. KANGNA RANAUT:

SHRI BHARTRUHARI MAHTAB:

SHRI JANARDAN MISHRA:

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

- (a) the initiatives being taken to increase fertilizer production and to promote its use among farmers; and
- (b) the measures put in place to address rising input costs and enhance sustainability in agriculture?

## ANSWER

THE MINISTER OF STATE IN THE MINISTRY OF CHEMICALS AND 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  7 th   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 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 25 th 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 306.67 LMT of Urea during 2024-25.

Further,  the  Government  has  implemented  Nutrient  Based  Subsidy  Policy  w.e.f. 01.04.2010 for Phosphatic and Potassic (P&K) Fertilizers. 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 boost fertilizer production and make country self-reliant the 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.

(ii) The number of P&K fertilizers covered under NBS policy has increased from 22 grades in 2021 to 28 grades.

(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): Under Urea  Subsidy  Scheme, Urea is presently  provided to  the farmers at a statutorily notified Maximum Retail Price (MRP). The MRP of 45 kg bag of Urea is Rs.242 per bag (exclusive of charges towards neem coating and taxes as applicable). The  difference  between  the  delivered  cost  of  Urea  at  farm  gate  and  net  market realization by the Urea units is given as subsidy to the Urea manufacturer/importer

by the Government of India. Accordingly, all farmers of the country are supplied Urea at the subsidized rates and thereby are beneficiaries of this scheme.

Under NBS Scheme, MRP is fixed by fertilizer companies as per market dynamics at reasonable  level  which  is  monitored  by  the  Government.  However,  to  ensure affordability,  special  provisions like Rs.  3500 per MT to cover 'Other Costs' which includes costs incurred from factory gate to farm gate, advantage / disadvantage due to increase / decrease in international prices, provision for GST component included in the MRP and provision for reasonable return @ 4% of net MRP (MRP-GST) have been  extended  to  both  imported  and  domestic  DAP  and  imported TSP  over  and above NBS subsidy for Kharif 2025 season to ensure availability in view of rising input costs.

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