Lok Sabha Question No. 1058 (UNSTARRED), answered on 2025-07-25
Subject: Fertilizer Self-Reliance & Manufacturing Modernisation
Ministry: CHEMICALS AND FERTILIZERS
Asked by: Shri Amrinder Singh Raja Warring

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

## LOK SABHA

## UNSTARRED QUESTION No. 1058 TO BE ANSWERED ON 25.07.2025

## Fertilizer Self-Reliance & Manufacturing Modernisation

## 1058:  SHRI AMRINDER SINGH RAJA WARRING:

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

- (a) whether the Government has formulated any strategy for reducing India's dependence on imported urea and DAP, if so, the details thereof;
- (b) whether  the  production  and  use  of  green  and  bio-fertilizer  alternatives  are  being scaled up under PM-PRANAM or related schemes;
- (c) whether any support is given to fertiliser manufacturing  units for modernisation or capacity expansion, if so, the details thereof; and
- (d) whether there are any plans to link fertilizer subsidies to the cost of production to protect farmers and farming sector facing challenges of high cost of production, if so, the details thereof?

## 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 7thOctober, 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 25thMay, 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 201415 annually.

Above 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. During 2024-25, 306.67 LMT of Urea was produced in the country.

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/bi-annual basis, is provided on notified P&K fertilizers depending on their  nutrient  content.  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. However, to reduce reliance on imported phosphatic and potassic fertilizers, 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, with a view to boost manufacturing and make country self-reliant in fertilizer production.

(ii) The number of P&K fertilizers covered under NBS policy has been increased from 22 grades in 2021 to 28 grades at present with a view to boost manufacturing and make country self-reliant in fertilizer production. 06 new grades added are NPK 08-21-21, NPK 09-24-24, Potash Derived from Molasses (PDM) (0-0-14.5-0), NPK 11-30-14 fortified with Magnesium, Zinc, Boron and Sulphur, Urea-SSP Complex 5-15-0-10 and SSP 016-0-11 fortified with Magnesium, Zinc and Boron.

(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): PM  Programme  for  Restoration,  Awareness  Generation,  Nourishment,  and Amelioration  of  Mother-Earth"  (PM-PRANAM)  scheme  aims  to  support  the  mass movement  started  by  States/UTs  to  save  the  health  of  Mother  Earth  by  promoting sustainable and balanced use of fertilizers, adopting alternate fertilizers, promoting

organic  farming  and  implementing  resource  conservation  technologies.  Under  the scheme, 50% of the fertilizer subsidy saved by a State/UT in a particular financial year by  way  of  reduction  in  consumption  of  chemical  fertilizers  (Urea,  DAP,  NPK,  MOP) compared to previous 3 years' average consumption, is passed on to that State/UT as Grant.

Further, under Market Development Assistance (MDA) Scheme (FY 2023-24 to 202526)  assistance  @  Rs.  1500/MT  is  provided  to  promote  soil  carbon  enhancers  viz., FOM/LFOM and organic fertilizer viz., PROM produced at Compressed Bio Gas (CBG) plants under GOBARdhan initiative.

These initiatives  of the  Government are expected to address the imbalanced use  of chemical fertilizers thereby reducing chemical fertilizer use.

(c): The Government had announced New Investment Policy (NIP) - 2012 on 2nd January, 2013 and its amendment on 7th 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, with each having production capacity of 12.7 LMT per annum. Therefore, these units have together added urea production capacity of  76.2  LMT  per  annum.  These  new  urea  plants  have  been  established  with latest/modern  technology  designed  for  much  lower  energy  consumption,  around  5.0 Gcal/MT. With the objective of promoting energy efficiency and maximizing indigenous urea production, New Urea Policy (NUP) - 2015 was made effective from 1st June 2015. Under this policy, Target Energy Norms were given to the urea units. The urea units were  expected  to  achieve  TEN  for  which  the  units  have  resorted  to  the  latest technological up gradation in the plants. Implementation of NUP-15 norms has resulted in significantly improving energy consumption of Urea plants from 6.04 Gcal/MT during 2014-15 to around 5.56 Gcal/MT during 2024-25.

(d): 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.

Further, under the NBS Policy, the Government announces a fixed rate of subsidy (in Rs. per Kg basis), based on nutrient content of the fertilizers, on annual/bi-annual basis. The subsidy is calculated taking into account all relevant factors including international prices,  exchange rate,  inventory  level  and  prevailing  Maximum  Retail Prices  of  P&K fertilizers and is independent of the cost of production.

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