India Approves New Urea Investment Policy to Boost Self-Reliance
Amid concerns of fertilizer shortage and over-use of chemical fertilizers, the Cabinet Committee on Economic Affairs approved the National Investment Policy for Urea (NIPU)-2026. This policy aims to achieve self-reliance in urea production, currently reliant on imports, by encouraging new investments in gas-based urea manufacturing units. Key changes include separating fixed and variable costs for transparency, introducing a Return on Equity (RoE) band of 12-16%, and mitigating foreign exchange risk. The government emphasizes promoting balanced and efficient fertilizer use through Integrated Nutrient Management (INM) to ensure sustainable nutrient management and long-term soil fertility.
Key Points
- India approved the National Investment Policy for Urea (NIPU)-2026 to achieve self-reliance in urea production.
- The policy encourages new investments in gas-based urea manufacturing units to reduce dependence on imports.
- Key changes include transparent cost separation, a 12-16% Return on Equity (RoE) band, and foreign exchange risk mitigation.
- The government promotes Integrated Nutrient Management (INM) for balanced and efficient fertilizer use.
- Despite increased indigenous production, India still relies on imports to meet urea demand.
Exam Facts
- The National Investment Policy for Urea (NIPU)-2026 was approved.
- The total fertilizers subsidy in 2025-26 is ₹2,17,281.10 crore.
- Urea subsidy alone for 2025-26 was ₹1,42,175.74 crore.
- The requirement of urea for the kharif season (as on March 3, 2026) is 370.84 LMT.
- The policy includes a Return on Equity (RoE) band with a floor at 12% and a ceiling at 16%.
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