Recently, Union Minister Mansukh Mandaviya told news agency PTI that India will stop importing urea by the end of 2025 as a massive push for domestic manufacturing has helped bridge the gap between supply and demand.
The Chemicals and Fertilisers Minister said that the Modi government is making efforts to promote alternate fertilisers like nano liquid urea and nano liquid di-ammonium phosphate (DAP).
He said that the Modi government has adopted a two-pronged strategy to end dependency on urea imports. Mandaviya highlighted that four closed urea plants have been revived and another factory is also being revived.
Noting that India needs around 350 lakh tonnes of urea per year to meet domestic demand, the Union Minister said that the installed domestic production capacities have been increased to around 310 lakh tonne from 225 lakh tonne in 2014-15.
“At present, the gap between the annual domestic production and demand is around 40 lakh tonne,” he said adding that the annual domestic production capacity of urea would reach around 325 lakh tonnes after the fifth plant is commissioned.
“Our agenda is very clear. By the end of 2025, Modiji will end the country’s import dependency on urea,” he said. Mandaviya said that the import bill of urea would become zero.
Where does India stand currently on urea imports?
According to data, urea imports fell to 75.8 lakh tonne in 2022-23 from 91.36 lakh tonne in 2021-22. In 2020-21, India imported 98.28 lakh tonne urea, 91.23 lakh tonne in 2019-20 and 74.81 lakh tonne in 2018-19.
In 2013-14, India imported 7.08 million tonne urea. Recently, the Prime Minister dedicated to the nation the Hindustan Urvarak & Rasayan Ltd (HURL) Sindri Fertiliser Plant, developed at a cost of more than Rs 8900 crores.
The Cabinet Committee on Economic Affairs (CCEA) in 2023 also approved the continuation of Urea Subsidy Scheme; Rs. 3,68,676.7 Crore committed for urea subsidy for 3 years (2022-23 to 2024-25).
The government has also introduced Sulphur coated Urea (Urea Gold) to address Sulphur deficiency in soil and save input costs for farmers.
Last month, Mandaviya announced that India will replace the consumption of 2.5 million tonnes of conventional urea with nano urea in FY24.
“In the past two years, the use of conventional urea has been lower in 344 districts, and 74 districts have started using more nano urea,” he said.
How the Modi government got to work to boost urea production immediately after coming to power
Merely a year after coming to power, the Modi government in 2015 revived three urea plants based in southern states. The government also made 100% neem coating mandatory for urea, both domestic and imported, in a bid to stop illegal diversion of highly subsidized fertilizer and reduce their wastage.
The UPA government had announced the closure of three urea plants namely Madras Fertilizers Ltd (MFL)in Manali, Mangalore Chemical and Fertilizers Ltd (MCFL) in Mangalore and Southern Petrochemicals Industries Corporation (SPIC) in Tuticorin.
The same was reversed by the Modi government in order to ensure smooth supply of urea in the region. “The decision to continue production of the three plants will go in favour of farmers, thousands of employees working at these facilities and to minimize our import demand,” a ministry official had said in 2015.
Had these three plants been kept shut, the entire requirement of the south would have to be imported, according to a government release from 2015.
The first decision taken by the Modi government after coming to power was to reform India’s urea policy in 2014. The decision to coat urea with neem resulted in the complete removal of urea shortage from the country.
As a result, Indian farmers got an adequate supply of urea which was a first in India. After providing adequate urea at subsidized rates to the farmers, the government recognized the need to educate farmers about their soil and its nutrients.
This was important to ensure that they selected the crop that was fit for production on their soil which would be instrumental to improve the yield of their crop along with their income.
In 2023, the government approved the urea subsidy scheme to ensure constant availability of urea to the farmers at the same price of Rs 242/45 kg bag excluding taxes and neam coating charges.
Out of the package, Rs. 3,68,676.7 crore were committed for urea subsidy for three years (2022-23 to 2024-25).
Black marketing of urea thrived under the Congress government
Speaking in Pilibhit in Uttar Pradesh on 9th April, Prime Minister Modi said that until 10 years ago, there used to be black marketing of urea, farmers had to face baton charges.
Pilibhit, Uttar Pradesh: PM Narendra Modi says, "Until 10 years ago, there used to be black marketing of urea, farmers had to face baton charges. Today urea is adequate and consistently available." pic.twitter.com/f8B27c4sMK
— IANS (@ians_india) April 9, 2024
“Today, urea is adequate and consistently available. The cost of urea per bag is Rs 3000 in the global market. Our government is providing urea to farmers for less than Rs 300 per bag,” Modi said.
Mansukh Mandaviya in his book titled “Fertilizing the Future” also highlighted how the Modi government had to make amends in the illicit system left behind by the UPA government.
Shortage of urea in MP and Rajasthan during the previous Congress government and black marketing by private traders was rampant.
The fertiliser, and by extension, the farm and agriculture sector had become a source of kickbacks for the UPA government across both its terms, particularly from 2007 to 2014.
The scam also involves Ratul Puri, nephew of senior Congress leader and former MP CM Kamal Nath – who is also an accused in the AgustaWestland chopper scam and Moser Baer scam.
A fertilizer scam in Rajasthan involved Agrasain Gehlot, the brother of Ashok Gehlot. Agrasain Gehlot was allegedly involved in a corruption scandal between 2007 and 2009 that involved the diversion of a crucial ingredient used for making fertilizers – all of which were meant for farmers in distress.
Essentially, government concessions available to pass benefits to the farmers were allegedly misused to create benefits for oneself and private companies.
According to the documents available, this scam largely took place when Ashok Gehlot was leading the state government in Rajasthan and Manmohan Singh was leading the central government at Delhi.
In 2018, farmers were up in arms just days after the Congress governments took charge in Madhya Pradesh and Rajasthan after the respective governments created a crisis by mismanaging the supply of urea.
According to reports, Rajasthan farmers are unable to procure urea which has led them to stand in long queues outside distribution centres.
Farmers protesting against the Congress government were lathicharged. The Congress governments allocated 50% urea to private traders as against 20%.
It was found that private traders have been hoarding urea and have been selling it in the black market. A 45 Kg bag of urea that used to be sold at Rs. 250 is being sold at Rs. 450 to the farmer without a bill.
