Lok Sabha Question No. 1460 (UNSTARRED), answered on 2016-05-03
Subject: FDI in Fertilizer Sector
Ministry: CHEMICALS AND FERTILIZERS
Asked by: M. K. RAGHAVAN

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

## LOK  SABHA

## UNSTARRED QUESTION NO. 1460

TO BE ANSWERED ON  :

03-05-2016

## FDI in Fertilizer Sector

## 1460  SHRI  M.K. RAGHAVAN:

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

- (a) the details of the FDI inflow in the fertilizer sector during the last three years;
- (b) whether  there  is  a  situation  of  shutting  down  fertilizer  units  especially  those engaged in manufacture of urea;
- (c) whether  the  situation  is  also  encouraging  more  imports  of  urea  with  domestic urea manufacturing companies remaining stagnant; and
- (d) if so, the details of the measures being taken to link the fertilizer sector with the Make in India campaign and boost the sector?

## ANSWER

MINISTER OF STATE IN THE MINISTRY OF CHEMICALS AND FERTILIZERS

## ( SHRI HANSRAJ GANGARAM AHIR)

- (a): There is no FDI flow in the fertilizer sector during the last three years.
- (b): No, Madam.
- (c): In view of (b) above, the question does not arise.
- (d): To facilitate fresh investment in urea sector and to make India self-sufficient in the  urea  sector,  the  Government  had  notified  New  Investment  Policy  -  2012  on  2 nd January,  2013  and  its  amendment  on  7 th October  2014.At  present,  there  are  6 proposals  with  Department  of  Fertilizers  for  setting  up  of  Greenfield  and  Brownfield (Expansion) projects.

Further, the Union Government has taken initiative to revive of Gorakhpur, Sindri, Talcher&Ramagundam units of Fertilizer  Corporation  of  India  Ltd  (FCIL)  and  Barauni unit of Hindustan Fertilizer Corporation Ltd (HFCL). Current revival status of these units is as under:

## 1. Talcher unit of FCIL:

Talcher  unit  of  FCIL  is  being  revived  by  consortium  of  the  nominated  Public Sector Undertakings (PSUs), namely, RCF, CIL, GAIL and FCIL are in progress to setup a coal-based fertilizer plant.  A Joint Venture (JV) Company, namely, Rashtriya Coal Gas Fertilizer Limited, has been incorporated.  Selection of coal-gasification technology is underway.

## 2. Ramagundam unit of FCIL:

Ramagundam  unit  of  FCIL  is  being  revived  by  consortium  of  PSUs  namely Engineers  India  Limited  (EIL),  National  Fertilizers  Limited  (NFL)  and  FCIL  who  have formed  JV  Company,  namely,  Ramagundam Fertilizers  &  Chemicals  Limited  (RFCL). Pre-Project  activities  started  at  site.  Zero  date  of  the  project  has  been  fixed  as 25.09.2015. Concession agreement signed between RFCL and FCIL. The Project will be completed by September 2018.

## 3 & 4. Gorakhpur &Sindri units of FCIL:

Union Cabinet had approved revival of Gorakhpur &Sindri units on 'bidding route' in  its  meetings  held  on  31.03.2015  and  21.05.2015  respectively.  In  view  of  poor response from bidders for Request for Qualifications (RFQ) for these units and keeping in view current market scenario, it is under consideration to revive Sindri and Gorakhpur units  of  FCIL  and  Barauni  unit  of  HFCL  through  Joint  Ventures  of  profit  making  and financially  strong  Public  Sector  Undertakings  (PSUs)  of  Ministry  of  Power,  Coal  and Petroleum & Natural Gas respectively.

## 5. Barauni unit of HFCL:

Union Cabinet in its meeting held on 31.03.2015 had approved revival Barauni unit of HFCL by demerger of Barauni Unit to create a new company. HFCL is currently under the purview of Board for Industrial and Financial Reconstruction (BIFR) therefore it is felt that revival of Barauni unit of HFCL would be much faster if HFCL comes out of BIFR. Accordingly,  for  faster  revival  of  Barauni  unit  of  HFCL,  a  proposal  for  financial restructuring of HFCL  to ensure positive net worth of the company  is under consideration.

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