What is India’s policy on urea production?, Pg10

Key Highlights:

• The Cabinet Committee on Economic Affairs approved the National Investment Policy for Urea (NIPU)-2026 to achieve self-reliance in urea production.
• The new policy aims to encourage investments in gas-based urea manufacturing units within India.
• Key changes include separating fixed and variable costs, introducing a Return on Equity (RoE) band of 12-16%, and mitigating foreign exchange risk.
• India's total fertilizer subsidy for 2025-26 is projected at ₹2,17,281.10 crore, with urea alone accounting for ₹1,42,175.74 crore.
• The country's urea production increased from 225 LMT in 2014-15 to 314.07 LMT in 2023-24.

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Detailed Insights:

• The NIPU-2026 addresses concerns about fertilizer shortages due to geopolitical situations and increased demand from El Niño effects.
• Previous urea policies were announced in 2012 and 2013, with amendments in October 2014 to facilitate fresh investments.
• Six new urea units were established under the 2012 policy, including four through Joint Venture Companies (JVC) of PSUs.
• An amendment in May 2015 for 25 existing gas-based urea units led to an additional production of 20-25 LMT annually.
• Urea is made available through a Direct Benefit Transfer (DBT) system, where subsidized fertilizers are sold via Point of Sale (PoS) devices.
• The government promotes Integrated Nutrient Management (INM) for balanced and efficient fertilizer use, combining organic, chemical, and biological inputs.
• The DBT system identifies beneficiaries using Aadhaar Card, Kisan Credit Card (KCC), or Voter Identity Card.

Key Concepts Involved:

• National Investment Policy for Urea (NIPU)-2026: A government policy aimed at boosting domestic urea production and achieving self-reliance through new investments.
• Direct Benefit Transfer (DBT): A system where subsidies are directly transferred to beneficiaries, ensuring transparent and efficient delivery of subsidized fertilizers.
• Integrated Nutrient Management (INM): An approach that combines various nutrient sources (organic, chemical, biological) to optimize crop nutrition and maintain soil health sustainably.