With continued growth in urea consumption in the country, the dependence on imports is expected to go up over the next few years necessitating capacity additions. Given the need for capacity additions, clarity on continuation of New Investment Policy-2012 (NIP-2012) is required for the urea plants that may be setup going forward to ensure adequate credit profile as the setting up of plant entails sizeable investment.

• ·       Urea consumption has increased at a CAGR of 3.4% during FY2016 to FY2025 and is expected to grow at a similar pace over next five years. The consumption growth is supported by continued price differential with other fertilisers and farmers’ affinity due to greening effect of urea.
• Domestic production had witnessed a 7.62-MMT increase from FY2019 to FY2025 with several new plants coming up under the New Investment Policy-2012 (NIP-2012). However, recently with the closure of two plants, the domestic production capacity has been limited at 30.6 MMTPA, indicating a significant shortfall against a urea demand of ~38 MMT in FY2025.