Steps taken to make India self-sufficient in the Urea Sector

Union Minister for Chemicals and Fertilizers, Shri D.V. Sadananda Gowda, while giving a written reply to a question on import of urea in the country, in Lok Sabha today, stated that in the last 3 years, average imported urea is 63.12 Lakh Metric Tonne (LMT) and average expenditure is Rs. 12,797.31 crores. The Minister informed that the average total production of urea in the country in the last three years is around 241 LMT and the total consumption (sales) is 305.48 LMT approximately. The gap is fulfilled through imports.


In view of the above, Government had announced New Investment Policy – 2012 on 2nd January, 2013 and its amendment on 7th October 2014 to facilitate fresh investment in urea sector and to make India self-sufficient in the urea sector, Shri Gowda stated.


Detailing the steps taken by Government to reduce the import burden of urea, Shri Gowda stated that under NIP- 2012, read with its amendment, following urea units in private sector have been installed:-


(i)   Matix Fertilizers & Chemicals  Limited (Matix) has set up a Coal Bed   Methane (CBM) based Greenfield  Ammonia-Urea complex at Panagarh, West Bengal with 12.7 Lakh Metric tonne per annum capacity. The commercial      production of Matix started on 1st October, 2017.


(ii)    Chambal Fertilizers & Chemicals Limited (CFCL) has also set up a Brownfield project at Gadepan, Rajasthan with 12.7 Lakh Metric tonne per annum capacity. The commercial production of CFCL-III started on 1stJanuary, 2019. The plants have manufactured 6.05 LMT of urea since commissioning.


The Minister further informed that the Government of India is also reviving 5 closed fertilizer plants, namely Talcher (Odisha), Ramagundam (Andhra Pradesh), Gorakhpur (Uttar Pradesh) and Sindri (Jharkhand) plants of Fertilizer Corporation of India Ltd. (FCIL)and Barauni (Bihar) plant of Hindustan Fertilizer Corporation Ltd. (HFCL), by setting up new Ammonia Urea plants of 12.7 Lakh metric tonne per annum capacity each.


Subsequent to commissioning/start of the above plants, the indigenous urea production will be enhanced by 63.5 LMT per year leading to corresponding reduction in import of urea. The project cost of urea plants as per DFR is Rs 37,971 crores approximately, Shri Gowda informed.


The Cabinet in its meeting held on 21.05.2015 has also decided to install a new urea plant of 8.646 Lakh Metric Tonne Per Annum (LMTPA) in the existing premises of Brahmaputra Valley Fertilizers Corporation Limited (BVFCL), which will subsequently replace the existing urea plants Namrup-II (capacity 2.20 LMTPA) and Namrup-III (capacity 2.70 LMTPA).


Stating the budget allocation for fertilizer subsidies for the year 2018-19, the Minister gave a figure of Rs. 73,435.21 crores and for the year 2019-20, the amount passed by vote on account is Rs. 35,430.42 crores, he stated. Further, Shri Gowda informed that in the year 2018-19, out of a total expenditure of Rs. 73,435.21 crores, Rs. 16,020.37 crores were spent to settle the dues from previous year.


The Government releases subsidy to the fertilizer companies on a regular basis subject to availability of budget, receipt of quality certificates (B2) from the State Governments etc. Whenever there is shortage of funds, the Government liquidates the pending subsidy by arranging loans under a Special Banking Agreement (SBA), the Minister stated.