News: The Cabinet Committee on Economic Affairs (CCEA) approved the National Investment Policy for Urea (NIPU)–2026 to boost domestic urea production and reduce import dependence.
About
- Promotes fresh investment in gas-based urea plants and strengthen India's self-reliance in urea production.
- Focuses on attracting private investment while ensuring affordable fertilisers.
Key Features
- Urea Self-Reliance: Increase domestic production and reduce imports.
- Investment Incentives: Ensure commercial viability and attract private capital.
- Cost Transparency: Separates fixed and variable costs in urea pricing.
- Assured Returns: Return on Equity (RoE) between 12% and 16% (minimum 12%, maximum 16%).
Gas-Based Urea Production
- Uses natural gas as feedstock and fuel.
- Methane provides hydrogen to produce ammonia, which combines with carbon dioxide to form urea.
- Cleaner and more efficient than coal- or naphtha-based production.
Status of Urea in India
- India is the world's largest importer and second-largest consumer of urea.
- Domestic Production: ~30 million tonnes.
- Demand: ~40 million tonnes.
- Major import sources: China, Russia, Oman and other Gulf countries
Need for NIPU–2026
- Reduce import dependence.
- Mitigate global supply-chain disruptions and geopolitical risks.
- Ensure food and fertiliser security.
- Promote Atmanirbhar Bharat in fertiliser production.
Broader Significance
- Ensures reliable fertiliser supply for agriculture.
- Reduces exposure to global price volatility.
- Supports MSMEs involved in plant construction and logistics.
- Strengthens agricultural and economic security.