Government Strengthens Domestic Fertilizer Production and Supply Chain
The Government of India has implemented comprehensive measures to enhance domestic fertilizer production capacity and ensure uninterrupted supply despite global market volatility and supply disruptions. Through strategic global tendering, the government secured 42.7 LMT of urea in 2026, with 25 LMT procured in April and 17.7 LMT in June, to strengthen the supply chain against international price fluctuations and raw material availability challenges.
Significant Capacity Expansion through New Urea Plants
Under the New Investment Policy (NIP)-2012, six new urea plants have been commissioned, each with a capacity of 12.7 LMTPA, collectively adding 76.2 LMTPA to the country's production capacity. The new facilities include four joint venture plants: Ramagundam unit of Ramagundam Fertilizers and Chemicals Ltd (RFCL) in Telangana, and three Hindustan Urvarak & Rasayan Limited (HURL) units in Gorakhpur (Uttar Pradesh), Sindri (Jharkhand), and Barauni (Bihar). Additionally, two private sector plants were established: Panagarh unit of Matix Fertilizers and Chemicals Ltd in West Bengal and Gadepan-III unit of Chambal Fertilizers and Chemicals Ltd (CFCL) in Rajasthan. This expansion has increased indigenous urea production capacity from 207.54 LMTPA in 2014-15 to 269.42 LMTPA in 2026-27.
Production Performance and Future Projects
Urea production has shown substantial growth, increasing from 225 LMT in 2014-15 to a record 314.07 LMT in 2023-24, with 293.30 LMT produced during 2025-26. The New Urea Policy (NUP)-2015, implemented for 25 gas-based urea units, has contributed an additional 20-25 LMT of annual production compared to 2014-15 levels. The government is further expanding capacity through 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). The National Investment Policy for Urea-2026 (NIPU-2026) was approved on 15 July 2026 to promote fresh investments in the sector.
Phosphatic and Potassic Fertilizer Initiatives
The Nutrient Based Subsidy (NBS) Scheme, effective since 01 April 2010, covers Phosphatic and Potassic (P&K) fertilizers under Open General License (OGL), allowing companies freedom to import/manufacture based on business dynamics. For Kharif-2026, NBS rates have been approved at ₹41,533.81 crore to ensure availability. To reduce import dependence on phosphatic fertilizers, the government implemented guidelines on 18 January 2024 establishing reasonable profit margins of 8% for importers/manufacturers, 10% for manufacturers, and 12% for integrated manufacturers. The number of P&K fertilizers covered under the NBS Scheme has expanded from 22 grades in 2021 to 28 grades, and freight subsidy on indigenously manufactured SSP fertilizer has been provided since Kharif 2022 to promote usage.
Supply Chain Management System
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 help maintain uninterrupted supplies to farmers.