Indian fertiliser industry is struggling with the challenges such as increased rates of raw materials, dependency on imports for Potash, government’s subsidy policies for the fertiliser sector. Efforts are being made to reduce this dependency and move towards self-sufficiency. Let’s dig deeper.
The fertiliser imports dropped by nearly 10 per cent in 2023-24 as local production increased, aiming for self-sufficiency in urea. Urea imports dropped 7 per cent to 7.04 million metric tonnes (MMT) due to a 20 per cent jump in domestic output to 31.4 MMT in 2023-24, according to the data. Lower imports of urea also came on the back of higher local production of nano urea, a liquid form of the farm chemical, as well as a move towards eco-friendly alternatives by farmers. The Indian Farmers Fertiliser Cooperative (IFFCO) has sold about 3.3 MMT of locally produced nano urea worth about Rs 7 crore between August 2021 to February 2024. Private players too are contributing to the growth of the fertiliser industry by increasing production of nano urea. Coromandel International Limited has unveiled a state-of-the-art nano fertiliser plant at its Kakinada complex in Andhra Pradesh. Hindustan Urvarak & Rasayan Limited (HURL) has announced partnership with Ray Nano Science & Research Centre for the production and distribution of nano urea. However, the fertiliser industry is struggling with the challenges such as increased rates of raw materials, dependency on imports for Potash, government’s subsidy policies for the fertiliser sector. Efforts are being made to reduce this dependency and move towards self-sufficiency. Let’s dig deeper.
The Union Government has set 2025-26 as the deadline by which the country will end all urea imports. To achieve this goal the government has focused on reviving closed fertiliser plants in Talcher, Ramagundam, Gorakhpur, Sindri, and Barauni to increase the fertiliser production. In this regard a lot has been achieved so far. However, with the help of impactful policy support, global partnerships for technology transfer and expansion and most importantly financial support for R&D and infrastructure from the government, the fertiliser industry can achieve self-sufficiency in the coming years.
India has one of the world’s largest fertiliser industries, driven by substantial agricultural demand. The market has seen consistent growth, propelled by increased agricultural activity, government support, and technological advancements in the sector. The industry comprises both domestic production and significant imports to meet fertiliser demands. Supportive government policies, subsidies, and schemes like the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) drive fertiliser usage and agricultural productivity. Integration of innovative technologies like precision farming, smart fertilisation methods, and bio-fertilisers enhances efficiency and boosts market growth. Growing environmental awareness fosters the demand for organic and eco-friendly fertilisers, driving market growth. International collaborations and agreements between companies contribute to market growth, expanding the availability of specialised fertilisers.
The India fertiliser market has experienced substantial growth owing to multiple factors that have contributed to its expansion and evolution. The conducive policy environment has catalysed investments across the public, cooperative, and private sectors, fostering a surge in fertiliser production. This encouragement led to a remarkable increase in total fertiliser output, reaching 46.22 MMT in 2021-22, representing an impressive 11.40 per cent per cent year-on-year growth. Maximize Market Research report noted that the India fertiliser market size was valued at Rs 1046.85 billion in 2023 and the total India fertiliser revenue is expected to grow at a CAGR of 5.7 per cent from 2024 to 2030, reaching nearly Rs 1543.15 billion by 2030.
India boasts a robust infrastructure with 33 large-scale urea plants, 21 units dedicated to producing DAP and complex fertilisers, and 3 units generating Ammonium Sulphate as a by-product. Such a diverse and extensive network of production facilities has substantially contributed to meeting the country’s fertiliser demands. Urea production during 2021-2022 increased to 24.93 MMT, while the estimated production of DAP and complex fertilisers rose to 13.74 MMT, reflecting a growth rate of approximately 6.51 per cent over the previous year. India’s reliance on imports, especially for urea (25 per cent), phosphates (90 per cent), and potash (100 per cent) has driven the government’s push for joint ventures abroad. These collaborations, with buy-back arrangements, foster long-term agreements for the supply of vital fertiliser inputs, securing the nation’s fertiliser demands. The convergence of these factors, favourable policies, robust production facilities, specific fertiliser type growth, and strategic international collaborations stands as the primary driver propelling the India fertiliser market towards sustainable growth and self-sufficiency in meeting its agricultural requirements.
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