The Government of India (GoI) would have to provide two types of subsidies—one to incentivise green ammonia production and another to bridge the gap between grey and green ammonia prices for fertiliser manufacturers. 

The GoI will provide green ammonia producers a subsidy of Rs. 1,500 crore over the first three years of their operations. Additionally, the annual subsidy for fertiliser manufacturers is estimated at Rs. 500 crore to bridge the cost gap between grey and green ammonia. Timely release of these subsidies will remain critical.

Exhibit: Major procurers (% share)

Source: Industry, ICRA Research; IFFCO – Indian Farmers Fertiliser Cooperative Limited, GNFC – Gujarat Narmada Valley Fertilizers and Chemicals