Cabinet gives nod for national urea investment policy 2026 to boost fertiliser production

Further, the key changes in comparison to NIP-2012 includes the separation of fixed and variable costs for greater transparency, introduction of a viable Return on Equity (RoE) band with a floor at 12 per cent and a ceiling at 16 per cent, and mitigation of foreign exchange risk through conversion of fixed cost into rupee after four years based on prevailing exchange rates.

These measures are estimated to result in savings of over Rs 250 crore for each plant established under NIPU-2026 compared to NIP-2012, according to an official statement.

Setting up of new urea manufacturing units will be covered under the NIPU-2026.

To attract new investments, a policy for investments in the Urea sector was finalised by the Department of Fertilizers for revamp, expansion, revival of brownfield units and setting up of greenfield projects in 2012.

Under New Investment Policy (NIP)–2012, a total of six new urea units have been set up which includes four units set up through Joint Venture Companies (JVC) of nominated PSUs and two urea units set up by the private companies. The period for new investment under NIP-2012 expired by October-2019.

At present, there are 33 operational urea manufacturing units with total installed capacity of 269.42 lakh metric tonnes (LMT). There is a need to increase indigenous production of urea as it currently falls short of demand and the country has to go in for imports of urea to fulfil this gap, said the government.

The Department of Fertilizers has received various proposals for setting up of urea units which will now be expedited with approval of the National Investment Policy.

--IANS

sps/na