India's $24B urea investment push to cut import reliance
17 proposals aim to boost domestic production capacity by 10M tonnes annually
1Massive investment proposals
India has received 17 investment proposals worth ₹2.04 trillion ($24.4B) to expand domestic urea production. Major state-run and private companies including GAIL, HURL, Kribhco, Chambal Fertilisers, and Matix have submitted plans. These cover both new plants and expansions of existing facilities under the National Investment Policy for Urea (Nipu)-2026. The projects could take about three years to become operational once approved.
2Current import dependence
India currently imports about 10 million tonnes of urea annually, meeting 25% of its total demand of 40 million tonnes. Domestic production covers around 30 million tonnes, with demand growing at 5% yearly. This heavy reliance on imports leaves India vulnerable to global price volatility and supply chain disruptions. The new investments aim to significantly reduce this dependence and strengthen food security.
3Project cost breakdown
A standard greenfield urea plant with 1.27 million tonnes annual capacity requires ₹10,000-12,000 crore investment. Brownfield expansions cost slightly less at ₹9,000-10,000 crore per project. Major companies have announced specific plans: Matix Fertilisers plans to double capacity in West Bengal with a ₹9,000 crore investment, while HURL proposes a ₹9,500-10,000 crore expansion in Gorakhpur.
4Economic benefits
Each 1 million tonne of domestic urea capacity replacing imports saves approximately $500 million in foreign exchange annually. The projects align with government goals to reduce forex outflows and insulate farmers from global market volatility. Additionally, they could lower the massive fertilizer subsidy bill, which reached ₹2.17 trillion in FY26 and was projected to potentially hit ₹3.5 trillion during price spikes.
5Policy framework
The Union Cabinet approved Nipu-2026 in July to attract investments and add 10 million tonnes of domestic urea capacity. This comes amid global fertilizer price surges exacerbated by West Asia conflicts. The policy provides a structured framework for evaluating proposals currently at various examination stages. It builds on previous efforts to boost self-reliance in this critical agricultural input.
6Company commitments
Several major players have confirmed specific expansion plans under the new policy. Chambal Fertilisers will establish a new 1.27 mtpa unit in Rajasthan. Matix targets commissioning its second West Bengal plant by 2030, pending approvals. These projects, combined with others already under construction from earlier policies, aim to meet India's growing urea demand for the next 5-10 years.
7Strategic considerations
Experts recommend complementing domestic production with diversified global supply partnerships, particularly for LNG and other key inputs. Professor Pradhan of BITS Pilani suggests exploring joint ventures to secure reliable supply chains. This dual approach would reduce vulnerability to disruptions while strengthening international relations in the fertilizer value chain.
8Long-term impact
Successful implementation could transform India from the world's largest urea importer to a more self-reliant producer. The projects would enhance food security, stabilize fertilizer prices, and reduce fiscal pressure from subsidies. However, execution risks remain, including timely approvals, financial closures, and maintaining project timelines amid global supply chain complexities.
Original article: mint - industry — India's $24B urea investment push to cut import reliance