A photograph of a farmer touring with baggage containing urea in Telangana’s Sangareddy district. |Photograph credit score: Mohd Arif
The Cupboard Committee on Financial Affairs just lately authorized the Nationwide Funding Coverage for Urea (NIPU)-2026 amid fears of scarcity of fertilizers throughout the ongoing kharif season as a result of state of affairs in West Asia, elevated demand on account of El Niño, and complaints about extreme use of chemical fertilizers reminiscent of urea.
The brand new coverage goals to make the import-dependent urea manufacturing sector self-reliant. In response to the federal government, the coverage will encourage new investments within the urea sector to arrange gas-based urea manufacturing models within the nation.
Key adjustments in comparison with the prevailing coverage embody separation of fastened and variable prices for higher transparency, introduction of a viable return on fairness (RoE) band with a decrease restrict of 12% and an higher restrict of 16%, and mitigation of overseas alternate threat by changing fastened prices into Indian rupees after 4 years based mostly on prevailing alternate charges.
India’s urea coverage
The Union authorities had introduced such insurance policies for the urea sector in 2012 and 2013, which had been amended in October 2014 to encourage new investments.
Six new urea models had been arrange below the 2012 coverage, 4 of which had been arrange by means of three way partnership corporations (JVCs) of designated PSUs and two by personal corporations. In response to the Union Ministry of Fertilizers, there are at the moment 33 urea manufacturing models in operation with a complete re-evaluated/put in capability of 269.42 million tonnes (LMT).
“There’s a want to extend home manufacturing of urea. There’s a hole between home urea manufacturing and demand, which is being crammed by urea imports,” the federal government mentioned. It additional added that the overall home urea manufacturing capability (Reassessment Capability, RAC) has elevated from 207.54 LMT per yr in 2014-15 to 269.42 LMT per yr in 2026-27.
The federal government additional revised the coverage for the prevailing 25 gas-based urea models in Might 2015, resulting in an extra manufacturing of 20-25 LMT of urea in comparison with the annual manufacturing in 2014-2015.
From 225 LMT per yr in 2014-15, the present manufacturing by all these models reached 314.07 LMT in 2023-24. “Throughout 2025-26, 293.30 LMT of urea was produced within the nation,” the federal government mentioned.
fertilizer subsidy
The whole fertilizer subsidy for 2025-26 is Rs 2,172.811 billion. In 2024-25, it was Rs 1,77,162.06 crore. Out of this, the urea subsidy alone amounted to Rs 142,175.74 million in 2025-26 and Rs 124,319.5 million in 2024-25. The subsidy portion of phosphorus and potassium is Rs 74,999.99 billion and Rs 52,810 billion respectively. To advertise natural fertilizers, the federal government has supplied subsidies of Rs 105.37 crore and Rs 32.56 crore within the final two monetary years.
Availability of urea
As of March 3, 2026, the nation requires 370.84 LMT of urea for the kharif season, based on knowledge supplied by the federal government to Parliament. The out there amount is 432.44 LMT, of which 381.59 LMT will likely be bought below the Direct Profit Switch (DBT) system and all of the backed fertilizers will likely be “bought to consumers by means of Level of Sale (PoS) gadgets put in at every retail outlet and the beneficiaries will likely be recognized by means of Aadhaar Card, KCC, Voter ID Card and so forth.” The requirement for 2024-25 was 364.01 LMT and the provision was 443.83 LMT.
The federal government claims it has taken steps to advertise balanced and environment friendly use of fertilizers. “The federal government is selling built-in nutrient administration (INM), which advocates the considered and scientific integration of natural sources, chemical fertilizers and organic inputs for environment friendly and sustainable nutrient administration,” the ministry mentioned, including that INM goals to satisfy the dietary necessities of crops in an economically and environmentally sustainable method whereas sustaining long-term soil fertility. The corporate has additionally been experimenting with nano-urea, nevertheless it seems to haven’t but caught on amongst farmers after controversy over its scientific validity and outcomes.
