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42.7 LMT of urea secured through Global Tenders to Strengthen Supply Chain

Published: Jul 22, 2026

By TIOLCorplaws News Service

NEW DELHI, JULY 22, 2026: THE Government of India has undertaken a series of measures to strengthen domestic fertilizer production, diversify raw material and fertilizer import sources, and ensure uninterrupted availability of fertilizers despite global supply disruptions and volatility in international markets. Domestic production is influenced by factors such as availability of raw materials and feedstocks, international price fluctuations, and technical shutdowns. To address these challenges, the Government has diversified sourcing and secured 25 LMT and 17.7 LMT of urea through global tenders in April 2026 and June 2026, respectively.

To ensure timely fertilizer availability, the Department of Agriculture & Farmers Welfare, in consultation with State Governments, assesses seasonal fertilizer requirements, while the Department of Fertilizers allocates supplies through monthly plans and monitors movement through the Integrated Fertilizer Management System (iFMS). Weekly review meetings with State officials and advance imports further help maintain uninterrupted supplies.

Under the New Investment Policy (NIP)-2012, the Government has commissioned six new urea plants, each with a capacity of 12.7 LMTPA, adding 76.2 LMTPA to the country's production capacity. These include four joint venture plants at 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. Consequently, indigenous urea production capacity has increased from 207.54 LMTPA in 2014-15 to 269.42 LMTPA during 2026-27.

The Government is also implementing the Talcher Fertilizers Limited (TFL) project and has recently approved a 12.7 LMTPA Brownfield Ammonia-Urea Complex at Namrup, Assam, to be developed as Assam Valley Fertilizer and Chemical Company Limited (AVFCCL).

Also, 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.

As a result, urea production increased from 225 LMT in 2014-15 to a record 314.07 LMT in 2023-24, while 293.30 LMT was produced during 2025-26. Further, the National Investment Policy for Urea-2026 (NIPU-2026) was approved on 15 July 2026 to promote fresh investments in the sector.

The Government has implemented Nutrient Based Subsidy (NBS) Scheme w.e.f. 01.04.2010 for Phosphatic and Potassic (P&K) Fertilizers. Under the Scheme, P&K fertilizers are covered under Open General License (OGL) and companies are free to import/manufacture these fertilizers as per their business dynamics. For Kharif-2026, NBS rates have been approved for Rs. 41,533.81 Cr to ensure availability of P&K fertilizers under the scheme.

To reduce dependence on imported Phosphatic fertilizers and make country self-reliant measures have been taken to encourage domestic production through guidelines 18.01.2024 on reasonableness of MRP, wherein importers/ manufacturers and integrated manufacturers are given reasonable profit of 8%/10% and 12% respectively; 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 Scheme; the number of P&K fertilizers covered under NBS Scheme has increased from 22 grades in 2021 to 28 grades; Freight Subsidy on SSP, which is an indigenously manufactured fertilizer, is being provided since Kharif, 2022 to promote SSP usage for providing Phosphatic or 'P' nutrient to the soil.

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