- NIPU-2026 revises investment framework for urea production
- 10 mnt capacity addition planned, targeting rising urea demand
The Fertiliser Association of India (FAI) has welcomed the Union Cabinet’s approval of the National Investment Policy for Urea-2026 (NIPU-2026), describing it as a significant step towards strengthening India’s self-reliance in urea production. According to the industry body, the policy will encourage fresh investments in domestic urea manufacturing and help reduce the country’s dependence on imports.
Rising urea demand highlights supply gap
FAI noted that India’s demand for urea is growing at around 5% annually and is projected to reach 40 million tonnes (mnt). In comparison, the country’s current domestic urea production stands at about 30 mnt, leaving a substantial gap between production and consumption. The association said that the country currently imports approximately 26% of its annual urea requirement.
NIPU-2026 aims to expand domestic production
According to FAI, the Cabinet has directed the establishment of 8-9 new gas-based urea plants, which are expected to add 10 mnt of domestic production capacity. The association said this infrastructure expansion will help bridge the supply gap and move India towards complete self-sufficiency in urea production.
FAI also noted that NIPU-2026 introduces a return on equity (RoE) of 12-16%, distinguishes between fixed and variable costs for subsidy purposes, and provides a policy framework aimed at encouraging investment in domestic urea manufacturing. Welcoming the Cabinet’s decision, FAI termed the policy a major initiative for achieving fertiliser self-reliance and said it provides a strong framework for future investment in the sector.
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