India Plans To Substantiate 2.5 MT Urea With Nano Urea In FY24: Minister

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In the fiscal year 2024, India plans to substitute 2.5 million tonnes of traditional urea with nano

Team Finance Saathi

02/Mar/2024

In the fiscal year 2024, India aims to substitute the use of 2.5 million tonnes (mt) of conventional urea with nano urea, as announced by Union Minister of Chemicals and Fertilisers, Mansukh Mandaviya, during a press conference on Friday. This initiative aligns with India's objective of attaining self-sufficiency in urea production by the year 2025.

During the first ten months leading up to February 2024, India's urea consumption recorded a decline from 35.7 million tonnes (mt) to 31.7 mt compared to the same period in the previous fiscal year, as stated by Union Minister of Chemicals and Fertilisers, Mansukh Mandaviya. Mandaviya announced plans to decrease conventional urea consumption by 2.5 mt in the current fiscal year, replacing it with an alternative fertilizer like nano urea. Anticipating a monthly average urea consumption of no more than 1 mt in February and March of FY24, the total urea consumption for the fiscal year is expected to reach 32.7 mt. This reduction is attributed to awareness initiatives promoting the use of nano urea among farmers, with increased adoption observed in 74 districts over the past two years.

The Indian Farmers Fertiliser Cooperative (IFFCO) has sold approximately 3.3 mt of nano urea, valued at about ₹7 crore, between August 2021 and February 2024. Nano urea, patented by IFFCO in liquid form, is claimed to enhance nitrogen availability to crops by 80% and reduce nutrient loss from fields, though these assertions face dispute from some scientists.

In addressing India's growing urea consumption, the government plans to utilize a fourth plant, owned by Talcher Fertilizers Limited in Odisha, to increase production capacity by 1.25 mt annually. Currently, three plants produce 28.4 mt of conventional urea each year. The combined use of increased conventional urea production and nano urea adoption is expected to reduce India's import bill by ₹15,000-20,000 crore, according to Union Fertiliser Secretary Arun Singhal's statement in April 2023.

Despite India's annual fertiliser requirement ranging from 58 to 63 million tonnes, domestic production falls short at 43 to 46 million tonnes, leading to substantial imports. As the second-largest consumer of fertilisers globally, India heavily depends on imports for muriate of potash (MOP), phosphate rock, urea, di-ammonium phosphate, and nitrogen, phosphorus, and potassium fertilisers. In the fiscal year 2022-23, India's fertiliser import bill reached ₹2.2 trillion, contributing to a record-high expenditure of ₹2.55 trillion on fertiliser subsidies.

Addressing this, Finance Minister Nirmala Sitharaman announced a 13% reduction in the allocation for fertiliser subsidies, aiming for ₹1.64 trillion in FY25 compared to the revised budget estimate of ₹1.89 trillion for FY24. The initial allocation for fertiliser subsidies for FY24 was ₹1.75 trillion.

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In the fiscal year 2024, India plans to substitute 2.5 million tonnes of traditional urea with nano

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