The Parliamentary Standing Committee on Chemicals and Fertilisers has urged the government to formulate a “comprehensive roadmap for the phased adoption of green ammonia in urea, DAP, and NPK production.”
The panel has called for a strategy encompassing plant-wise targets, investment plans, technology partnerships, infrastructure development, and the requisite quantum of subsidy support. This comes at a time when urea imports are set to hit a record high in 2025-26. Additionally, the panel recommended the establishment of a “Fertiliser Supply Security Fund.”
India has already imported 98 lakh tonnes (lt) of urea during the first 11 months of the current fiscal year. Industry estimates suggest another 3-5 lt will arrive by March 31, while the government expects total arrivals of approximately 17 lt by May 31. This surge is poised to eclipse the previous record of 98.28 lt set in 2020-21.
Significant opportunity
In its Demands for Grants report tabled on Friday, the committee noted that the National Green Hydrogen Mission, with an outlay of ₹19,744 crore through 2029–30, presents a significant opportunity to reduce the fertiliser sector’s reliance on imported natural gas. India currently consumes 170-190 lt of ammonia annually, largely derived from natural gas. This leaves the sector vulnerable to global price volatility and triggers sharp spikes in subsidy expenditure during international price shocks.
While the panel lauded the progress under the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme, where 7.24 lt of green ammonia per year has been contracted for 13 fertiliser plants, it observed that a clear, long-term integration roadmap has yet to be finalised. The committee, chaired by TMC Rajya Sabha MP Kirti Azad, advised the Department of Fertilizers and the Ministry of New and Renewable Energy to collaborate on this strategy to mitigate LNG import exposure and support India’s climate and self-reliance goals.
The report highlighted that India remains critically dependent on imports for raw materials: domestic production meets only 10 per cent of rock phosphate requirements, while potash is almost entirely imported and sulphur remains in short supply. This near-total dependence exposes the domestic supply chain to geopolitical disruptions and foreign exchange risks.
Need for proactive strategy
Citing ongoing tensions in West Asia following the US-Israel strikes on Iran, the panel stressed the need for a proactive strategy. “The Committee urge that the Government must not wait for a crisis to trigger corrective action,” the report stated, recommending a Fertilizer Supply Security Fund to maintain strategic buffer stocks of critical P&K fertilisers and raw materials like DAP, MOP, and phosphoric acid.
Furthermore, the panel suggested that the Nutrient Based Subsidy (NBS) framework move away from its current bi-annual revision to an automatic, price-linked adjustment mechanism. This would ensure private players remain incentivised to import during international price surges, thereby preventing supply bottlenecks.
On the production front, urea output has risen from 239 lt in 2018-19 to 307 lt in 2024-25, while phosphatic fertiliser production grew from 175 lt to 214 lt in the same period. Despite this, India still imports 25% of its urea, 90 per cent of its phosphates, and 100 per cent of its potash. The panel emphasised the need to ensure the profitability of existing units and the revival of closed plants to bridge the demand-supply gap.
With the domestic demand for P&K fertilizers projected to rise to 305 lt by 2035–36, the committee noted that seven companies are currently constructing 59.65 lt of finished fertiliser capacity and 44.21 lt of intermediate capacity. These projects, expected to be commissioned between 2028 and 2030, are seen as vital to enhancing domestic availability and tempering import dependence.