On March 25, 2025, the Union Minister of State for Chemicals and Fertilizers Smt Anupriya Patel stated that the Government of India introduced the New Investment Policy (NIP) – 2012 on January 2, 2013, with an amendment on October 7, 2014, to encourage fresh investment in the urea sector.
The policy aimed to enhance domestic production capacity and reduce dependency on imports, making India self-sufficient in urea production.
Under NIP-2012, 6 new urea manufacturing units have been established, including four set up through Joint Venture Companies (JVC) of nominated Public Sector Undertakings (PSUs) and two by private companies.
The JVC units include the Ramagundam Urea unit in Telangana and three urea units operated by Hindustan Urvarak & Rasayan Limited (HURL) in Gorakhpur (Uttar Pradesh), Sindri (Jharkhand), and Barauni (Bihar).
The private sector units include the Panagarh Urea unit of Matix Fertilizers and Chemicals Ltd (Matix) in West Bengal and the Gadepan-III Urea unit of Chambal Fertilizers and Chemicals Ltd (CFCL) in Rajasthan.
Each of these units has an installed production capacity of 12.7 Lakh Metric Tonnes per annum (LMTPA), significantly boosting the country’s total urea production capacity.
The establishment of these new units has added 76.2 LMTPA to the total urea production capacity, increasing it from 207.54 LMTPA in 2014-15 to 283.74 LMTPA in 2023-24. These facilities are designed using the latest energy-efficient technologies, enhancing productivity while reducing energy consumption.
The Government has also implemented the Nutrient-Based Subsidy (NBS) Policy for Phosphatic and Potassic (P&K) fertilizers from April 1, 2010.
Under this policy, a fixed subsidy is provided based on nutrient content, while fertilizer companies determine market prices. The policy encourages private sector participation and investments in fertilizer production, ensuring a stable supply of essential nutrients for Indian agriculture.
The government’s initiatives under NIP-2012 and the Nutrient-Based Subsidy Policy have significantly boosted domestic urea production and fertilizer self-sufficiency. These measures ensure a stable supply for farmers while promoting energy-efficient and technologically advanced manufacturing.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
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Published on: Mar 26, 2025, 9:58 AM IST
Nikitha Devi
Nikitha is a content creator with 6+ years of experience in the financial domain. Specialising in personal finance, investments, and market insights, Nikitha simplifies complex financial topics, making them accessible to readers.
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