Neha BaruahUrea Production in India: India has witnessed a remarkable surge in urea production, overcoming significant challenges in the fertiliser sector. This progress aligns with the government’s push for atmanirbharta (self-reliance), driving substantial investments in domestic manufacturing.
Milestones of Urea Production in India
- Growth Over Time: From 2011-12 to 2023-24, India’s domestic urea production increased from 22 million tonnes to 31.4 million tonnes.
- Decline in Imports: Imports reduced from 7.8 million tonnes to 7 million tonnes during the same period.
- Recent Drop: A 31.7% decrease in imports in 2023-24 could bring the figure below 5 million tonnes, a first since 2006-07.
New Plants and Strategic Investments
The production boom is driven by six state-of-the-art plants developed by leading companies like Hindustan Urvarak & Rasayan Ltd (HURL), Chambal Fertilisers, Matix Fertilisers, and Ramagundam Fertilizers.
- Investment Range: Rs 6,000-8,600 crore per plant.
- Total Output: These facilities collectively produced 7.55 million tonnes of urea in 2023-24.
- Energy Efficiency: Advanced technologies reduce energy consumption to approximately 5 giga-calories per tonne of urea.
Strategic Locations and Market Impact
The new plants are strategically situated in eastern India—states like Uttar Pradesh, West Bengal, Bihar, Jharkhand, and Telangana—shifting the focus from older facilities in Punjab and Haryana.
- Matix Fertilisers: Holds a 20% market share in Eastern India and is the sole producer in West Bengal.
Innovations and Upcoming Projects: Urea Production in India
A notable development is the construction of a seventh plant in Talcher, Odisha, at an estimated cost of Rs 17,080.69 crore.
- Unique Feature: This plant will use coal gasification technology, a departure from the conventional natural gas-based process.
- Current Progress: About two-thirds of the project is complete.
Economic Dynamics: Domestic vs Imported Urea
- Investment Total: Rs 61,575 crore across new plants.
- Cost Comparison:
- Imports: $370-403 per tonne.
- Domestic Production: $493 per tonne, which could drop to $427 per tonne with tax exemptions.
Consumption Trends and Pricing Challenges
India’s urea consumption rose from 29.6 million tonnes in 2011-12 to 35.8 million tonnes in 2023-24.
- Frozen Prices: The price of urea has remained unchanged since 2012, encouraging unsustainable consumption patterns.
- Need for Reform: A balanced pricing strategy is essential to ease the burden on domestic production and imports.
Future Prospects
The establishment of LNG terminals and a robust pipeline network is reshaping the economics of urea production.
- Regional Focus: Northern and eastern regions are prioritised for domestic production, while southern areas may lean towards imports.
- Sustainability Goals: A shift towards efficient production and consumption practices is critical for the long-term health of India’s agricultural sector.
India’s urea production boom signifies a pivotal step towards self-reliance, underpinned by innovation, strategic investments, and a commitment to sustainability.
Neha Baruah
