90% of urea cost from natural gas, 26% domestically sourced

Who it concerns: Ministry of Chemicals and Fertilisers, Department of Fertilisers, and the general public including farmers and taxpayers affected by fertiliser subsidies and prices.

What the committee found

• Constitute a task force to promote domestic urea production under the New Investment Policy.
• Expand phosphatic and potassic (P&K) fertiliser capacity through fiscal and tax incentives for new units.
• Develop indigenous technology for setting up and maintaining fertiliser plants to reduce dependence on foreign licensing.
• Modify the natural gas procurement mechanism to ensure constant supply at competitive prices and expedite natural gas extraction projects.
• Ensure timely completion of projects to enhance domestic P&K fertiliser production and facilitate long-term agreements with raw material-rich countries.
• Set up a special task force for the upgradation, modernisation, and revival of aging urea plants.
• Implement new brown-field and green-field fertiliser projects to minimise import requirements.
• Formulate stringent policies to stop black marketing, establish a network of labs for quality checks, and set up a grievance redressal mechanism.
• Assess the extension of the Urea Subsidy Scheme beyond March 31, 2025.
• Promote higher production of nano fertilisers and introduce a Production Linked Incentive (PLI) scheme for drones used for spraying.
• Train farmers to encourage balanced use of fertilisers, crop rotation, and natural farming methods.

Also in the document

• 90% of the total cost of urea is natural gas, of which only 26% is domestically procured.
• India imports 95% of its phosphate and 100% of its potash requirements.
• Out of 33 operational urea plants, 27 are older than 25 years and 7 are older than 50 years.
• The Committee noted that the sector needs to transition to new technology within the next five years.