Fertiliser self-reliance: reviving urea plants

Two public-sector fertiliser companies, Fertilizer Corporation of India (FCIL) and Hindustan Fertilizers Corporation (HFCL), were closed down from September 2002 because of obsolete technology, high energy consumption and economic unviability. The Union Cabinet approved the revival of the Talcher and Ramagundam units of FCIL on 4 August 2011, and of the Gorakhpur and Sindri units of FCIL and the Barauni unit of HFCL on 13 July 2016, in each case through a joint venture of nominated public sector undertakings setting up gas-based plants of 1.27 MMTPA capacity. Separately, the New Investment Policy 2012 was announced on 2 January 2013 and amended on 7 October 2014, and the New Urea Policy 2015 was notified on 25 May 2015 for the 25 existing gas-based units. Indigenous production rose from 225 LMT in 2014-15 to 244.75 LMT in 2015-16.

The four revived plants came on stream between 2021 and 2022. Ramagundam was commissioned on 22 March 2021 and dedicated to the nation on 12 November 2022, its foundation stone having been laid on 7 August 2016; it makes 12.7 LMT a year of neem-coated urea. Gorakhpur was commissioned and dedicated on 7 December 2021. Barauni started urea production on 18 October 2022 and was inaugurated on 2 March 2024, at an estimated investment of ₹9,512 crore. Sindri started production on 5 November 2022 and was dedicated on 1 March 2024. Together these four plants added 50.8 LMT a year of indigenous urea. National production reached a record 314.07 LMT in 2023-24.

Urea is sold at a statutorily notified maximum retail price of ₹242 per 45 kg bag, exclusive of neem-coating charges and taxes, and the difference between the delivered cost at the farm gate and what the unit realises is paid to the manufacturer or importer as subsidy. All 33 urea plants now operating are natural-gas based; the Department told the Standing Committee that gas is about 90 per cent of the cost of urea, and that 74 per cent of the requirement is imported under long-term agreements with 26 per cent from domestic sources. Under the New Urea Policy 2015, units are given targets at 100 per cent of reassessed capacity plus expected production beyond it, with subsidy on beyond-capacity output tied to the import parity price; the policy has added 20-25 LMT a year compared with 2014-15. Since 24 August 2022, under the One Nation One Fertiliser scheme, all subsidised fertilisers — urea, DAP, MOP and NPKS — are marketed under the single Bharat brand. The Department of Fertilizers was given an estimated net allocation of ₹1.71 lakh crore in the Union Budget 2026-27.

The fifth plant, Talcher, will be India's first to make urea by coal gasification, and had reached 67.06% overall physical progress as on 30 May 2025; on completion it adds 12.7 LMTPA. The Union Cabinet approved a new brownfield ammonia-urea complex at Namrup, Assam on 19 March 2025, of at least 12.7 LMTPA at an estimated cost of ₹10,601.40 crore, with a tentative commissioning schedule of 48 months. On 15 July 2026 the Cabinet Committee on Economic Affairs approved the National Investment Policy for Urea-2026, which separates fixed and variable costs and sets a return-on-equity band of 12 to 16 per cent. Production has eased from the 2023-24 record: 306.67 LMT in 2024-25 — the Department told the Standing Committee that one private plant of about 12 LMT annual capacity had been sold and was out of urea — and 293.30 LMT in 2025-26. Against that, urea consumption was 388 LMT in 2024-25 and is expected to reach 444 LMT by 2035-36, so imports continue to fill the gap.