Lok Sabha Question No. 1109 (UNSTARRED), answered on 2025-12-05
Subject: Domestic Production of Chemical Fertilizers
Ministry: CHEMICALS AND FERTILIZERS
Asked by: Shri Parshottambhai Rupala

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

## LOK SABHA

## UNSTARRED QUESTION NO. 1109 TO BE ANSWERED ON 05.12.2025

## Domestic Production of Chemical Fertilizers

## 1109: Shri Parshottambhai Rupala:

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

- (  a)  whether  any  steps  have  been  taken  by  the  Government,  in  view  of  Swadeshi  Bharat,  to enhance domestic production of Chemical Fertilizers, if so, the details thereof;
- (b)  whether Government is aware of the recent curtailment of Di-Ammonium Phosphate (DAP) supply from China, if so, the details and impact thereof;
- (c) whether the measures have been taken by the Government to ensure timely and uninterrupted fertilizer supply to farmers, if so, the details thereof;
- (d)  whether  the  Government  intends  to  implement  New  Energy  Norms  and  fix  the  revised component for Urea Manufacturing Units; if so, the details thereof; and
- (e) the timeline by which the Government will resolve the long-pending issue of Rs. 2,300 per metric tonnes towards fixed cost for certain PSU and Cooperative Urea units pending since 2014?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF CHEMICALS & FERTILIZERS

## (SMT. ANUPRIYA PATEL)

- (a):  With regard to Urea Fertilizers, it may be stated that 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.

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 NBS policy, P&K fertilizers are covered under Open General License (OGL) and companies are free to import/manufacture these fertilizers as per their business dynamics.

To boost domestic 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, has been approved since Kharif, 2022 to promote SSP usage for providing Phosphatic or 'P' nutrient to the soil.
- (b):  In  October  2021 , China  amended  its  catalogue  of  commodities  requiring  mandatory additional  inspection  prior  to  export  of  fertilizer-related  items,  including DAP.  The  details  of production, consumption and import of DAP including import from China during last three years are given below:-
- (c): 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 online 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.

| DAP     | DAP         | DAP        | fig. in LMT   | fig. in LMT       |
|---------|-------------|------------|---------------|-------------------|
| Year    | Consumption | Production | Total Import  | Import from China |
| 2022-23 | 105.31      | 43.50      | 68.72         | 12.17             |
| 2023-24 | 109.72      | 42.96      | 56.71         | 22.28             |
| 2024-25 | 96.29       | 37.72      | 49.72         | 08.47             |

Further,  Phosphatic  &  Potassic  (P&K)  fertilizers  including  Di-Ammonium  Phosphate  (DAP)  are under Open General License (OGL). The fertilizer companies are free to import / manufacture these fertilizers as per their business dynamics. 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 keep the prices of fertilizers stable. The said provisions have been extended for Rabi 2025-26 season also.

(d) : With regard to the implementation of new energy norms, an Expert Group under NITI Aayog was engaged to recommend the energy norms to be applicable from 1st April, 2025. The Group has submitted its report on the proposed new energy norms for Urea units. The report is presently under examination in the Department of Fertilizers.

(e) : As per the observation of Expenditure Finance Committee (EFC) that the issues related to the costing  of  Urea  units  may  be  referred  to  Chief  Advisor  (Cost)  in  the  Ministry  of  Finance  for examination  and  recommendation,  the  Department  of  Fertilizers  requested  Department  of Expenditure that the Chief Advisor (Cost) may examine and give recommendations on reinstating the  provisions  of  the  minimum  fixed  cost  of  Rs.  2300/MT  under  the  Modified  NPS-III  with retrospective effect i.e. from 2nd April 2014. Report of the Chief Advisor (Cost) has been received in the Department, which is currently under examination.

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