New Delhi: The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, on Wednesday approved the National Investment Policy for Urea-2026 for Atmanirbhar Bharat (NIPU-2026), aimed at encouraging fresh investments in domestic urea production and reducing India’s dependence on imports.
The new policy seeks to promote the establishment of gas-based urea manufacturing plants across the country to bridge the gap between domestic production and rising demand, thereby moving India closer to self-sufficiency in fertiliser production.
According to the government, NIPU-2026 introduces several key reforms over the earlier New Investment Policy (NIP)-2012. These include the separation of fixed and variable costs to improve transparency, the introduction of a Return on Equity (RoE) framework with a minimum of 12% and a maximum of 16%, and measures to mitigate foreign exchange risks by converting fixed costs into Indian rupees after four years based on prevailing exchange rates.
The government estimates that these changes will result in savings of more than ₹250 crore per plant established under the new policy compared with projects approved under NIP-2012.
The policy will serve as the framework for approving and supporting new gas-based urea manufacturing units in the country. The Centre expects it to attract fresh investments and enhance domestic fertiliser production capacity in the coming years.
The Department of Fertilizers introduced the New Investment Policy (NIP)-2012 to encourage investments in greenfield, brownfield, expansion and revival projects in the urea sector. Under that policy, six new urea plants were established, including four through joint ventures involving public sector undertakings and two by private companies. The investment window under NIP-2012 closed in October 2019.
India currently has 33 operational urea manufacturing units with a combined installed capacity of 269.42 lakh metric tonnes (LMT). However, domestic production continues to fall short of demand, necessitating substantial imports each year.
The government said the Department of Fertilizers has received multiple proposals for setting up new urea plants, making a fresh investment policy essential to facilitate new projects and strengthen India’s fertiliser security.
