India’s Urea Consumption Nears 40 Million Tonnes, Pg 9.

Key Highlights:

• India’s urea consumption grew from 14 MT in 1990–91 to nearly 40 MT in 2024–25.
• Domestic production in 2024–25 (Apr–Sep) stood at 144.4 lakh tonnes, while imports fell to 39.79 lakh tonnes.
• The Centre’s 2015 policy made it mandatory to coat all domestically manufactured and imported urea with neem, improving nitrogen efficiency and reducing misuse.
• The maximum retail price (MRP) of urea remains ₹5,360 per tonne, unchanged for over a decade, despite global price fluctuations.
• Major urea producers include IFFCO, NFL, KRIBHCO, Chambal Fertilisers, and RCF, with IFFCO leading at 48.16 lakh tonnes capacity.
• Imports now account for less than 10 MT, with most new capacity commissioned between 2019–2022 (Rajasthan, Telangana, West Bengal, Bihar, Jharkhand).

Detailed Insights:

• Policy Evolution: The 2015 Neem-Coating Policy was crucial in curbing black marketing and improving soil nutrient absorption by slowing nitrogen release.
• Self-Reliance in Fertilisers: Recent projects (e.g., Ramagundam, Barauni, Gorakhpur) have revived closed plants under Hindustan Urvarak & Rasayan Ltd. (HURL), helping India move towards fertilizer import substitution.
• Consumption Trends: Rising due to greater cropped area, monsoon-linked irrigation, and government fertilizer subsidies.
• Fiscal Implications: Urea remains the most subsidized fertilizer; over 25 bags per farmer per year are subsidized, straining fiscal space but keeping rural costs low.
• Industrial Impact: Low urea prices have discouraged adoption of alternative nitrogen sources (like biofertilizers and nitrification inhibitors), affecting environmental goals.
• Supply Chain Efficiency: New LNG terminals and pipeline connectivity are improving cost efficiency in urea production and transportation.

Scientific/Technical Concepts Involved:

• Neem-Coated Urea: Urea granules coated with neem oil to slow nitrogen release, reduce leaching, and prevent diversion to non-agricultural use.
• Nutrient Use Efficiency (NUE): The percentage of nutrients absorbed by crops from applied fertilizer; improved by controlled-release fertilizers.
• Urea (46% Nitrogen): A nitrogenous fertilizer critical for plant growth but prone to volatilization and runoff losses without proper management.