Lok Sabha Question No. 4357 (UNSTARRED), answered on 2024-12-20
Subject: Domestic Production of  Fertilizers
Ministry: CHEMICALS AND FERTILIZERS
Asked by: Shri P P Chaudhary

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

## LOK SABHA

## UNSTARRED QUESTION NO. 4357 TO BE ANSWERED ON 20.12.2024

## Domestic Production of Fertilizers

## 4357 :   SHRI  P P CHAUDHARY:

Will the Minister of Chemicals and Fertilizers be pleased to state:

- (a) the specific initiatives taken to increase domestic  fertilizer production capacity  during  the  last  three  years,  along  with  the  increase  in  production achieved therefrom;
- (b) whether any assessment has been conducted regarding demand-supply gap in fertilizers, State-wise; if so, the steps taken to address shortages thereof;
- (c) the  number  of  public-private  partnership  projects  approved  for  fertilizer production  enhancement,  along  with  their  capacity  and  implementation status; and
- (d) whether any measures have been implemented to ensure timely availability of  fertilizers  at  affordable  prices  to  farmers,  if  so,  the  details  thereof  and impact on farm input costs?

## ANSWER

## THE 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  2 nd 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  of  76.2  LMTPA  thereby  total  production  urea production  capacity  has  increased  from  207.54  LMTPA  during  2014-15  to  283.74 LMTPA at present.

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.  The  NUP-2015  has  led  to additional  production  of  urea  by  20-25  LMTPA  as  compared  to  the  production during 2014-15.

These 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.

With  regard  to  P&K  Fertilizers,  the  Government  has  implemented  Nutrient Based  Subsidy  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/biannual  basis,  is  provided  on  notified  P&K  fertilizers  depending  on  their  nutrient content. The P&K sector is decontrolled and the fertilizer companies manufacture/import  fertilizers  as  per  the  market  dynamics.  To  enhance  the domestic production and supply of fertilizers in India, the Government has notified Potash  derived  from  Molasses  (PDM)  which  is  100%  indigenously  manufactured fertilizer under Nutrient based subsidy (NBS) scheme.

The details of production of fertilizers in the country during last three years are given below:-

## (In LMT)

| Years   |   Urea |    P&K |
|---------|--------|--------|
| 2021-22 | 250.72 | 185.23 |
| 2022-23 | 284.94 | 200.35 |
| 2023-24 | 314.07 | 189.26 |

(b): Department    of  Agriculture  &  Farmers  Welfare  (DA&FW)  assesses  the requirement for major fertilizers viz. UREA, DAP, MOP and NPKS fertilizers, before each cropping season (viz. Kharif & Rabi) through 'Zonal Conference for Agricultural Inputs'.    Based  on  the  assessment  done  by  DA&FW,  Department  of  Fertilizers allocates adequate quantities of fertilizers to States by issuing monthly supply plan and continuously monitors the availability  position.  These supplies are met through indigenous production as well as imports.

(c): Presently, there are no such specific public-private partnerships.

(d): Under  the  Urea  Subsidy  Scheme,  Urea  is  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  are being supplied urea at the subsidized rate.

Under  Nutrient  Based  Subsidy  (NBS)  scheme,  subsidy  is  fixed  keeping  in view international prices of key fertilizers & raw materials and fluctuations, if any, are  subsumed  while  fixing  NBS  rates  for  P&K  fertilizers  annually  /  bi-annually. During Kharif  2024,  the  subsidy  per  MT  in  respect  of  DAP  was  ₹21676  whereas during  Rabi  2024-25,  the  subsidy  per  MT  in  respect  of  DAP  has  been  fixed  at ₹21911.  In  addition,  in  order  to  ensure  smooth  availability  of  DAP  at  affordable prices  to  farmers,  Government  has  provided  special  packages  on  DAP  over  and above  the  NBS  subsidy  rates  on  need  basis.  In  2024-25,  the  Government  has approved one-time special package on DAP beyond the NBS rates on actual PoS (Point of Sale) sale of DAP for the period from 01.04.2024 till 31.12.2024 @ ₹ 3500 per  MT  to  the  P&K  fertilizer  companies  with  approximate  financial  implication  of ₹2625 crores to ensure sustainable availability of DAP at affordable prices to the farmers  and  support  the  agriculture  sector  and  related  activities  and  strengthen food security scenario in the country.

Further,  the  following  steps  are  taken  by  the  Government  every  season  for ensuring timely and adequate supply of fertilizers in the country:

- i. Before the commencement  of  each  cropping  season, Department of Agriculture and Farmers Welfare (DA&FW), in consultation with all the State Governments, assesses the state-wise & month-wise requirement of fertilizers.
- ii. On  the  basis  of  requirement  projected,  Department  of  Fertilizers  allocates sufficient/  adequate  quantities  of  fertilizers  to  States  by  issuing  monthly supply plan and continuously monitors the availability.
- iii. The movement of all major subsidized fertilizers is monitored throughout the country  by  an  on-line  web  based  monitoring  system  called  integrated Fertilizer Monitoring System (iFMS);
- iv. Regular Weekly Video Conference is conducted jointly by DA&FW and D/o Fertilizers with State Agriculture Officials and corrective actions are taken to dispatch fertilizers as indicated by the State Governments.
- v. The gap between demand (requirement) and production of fertilizers is met through imports. The import for the season is also finalized well in advance to ensure timely availability.

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