India to meet 90% of its domestic urea demand by 2030 to improve food security

New Delhi: India plans to add 13.7 million tonnes (mt) of annual urea production capacity by 2030, taking domestic capacity to about 43.7mt as the country seeks to cut import dependence and shield farmers from volatile global fertilizer prices, according to two people aware of the development.

India's annual urea demand stands at around 40mt and is growing at about 5%. Domestic production meets roughly 75% of the country's requirement, with imports making up the balance. The expansion is intended to reduce that dependence as the escalating West Asia conflict drives up global fertilizer prices.

An estimated 43.5-43.7mt production will equivalent to roughly 90% of projected domestic demand of 48.61mt by 2030. Every 1mt of domestic capacity that replaces imports can save about $500 million annually in foreign exchange, according to the estimate cited in the reporting, according to Satyam Shivam Sundaram, partner, Government and Public Sector, EY India. The potential savings matter as fertilizer subsidies remain one of the largest components of the Centre's support to agriculture.

"We expect an additional 13.5-13.7 million tonnes of urea production capacity to become operational by 2030,” said one of the people cited above.

The expansion includes 10 mt of additional annual capacity envisaged under the National Investment Policy for Urea-2026 (NIPU-2026), alongside two domestic projects of 1.27 mt each and a proposed venture involving a Russian fertilizer producer, this person said.

Mint reported on 26 September that the Department of Fertilizers had received 17 proposals from companies including GAIL (India) Ltd, Hindustan Urvarak & Rasayan Ltd (HURL), Krishak Bharati Cooperative Ltd (Kribhco), Chambal Fertilisers and Chemicals Ltd and Matix Fertilizers and Chemicals Ltd to set up new urea plants. The greenfield and brownfield proposals are at various stages of examination by the department.

The Union cabinet approved NIPU-2026, which envisages 10 mt of additional annual urea capacity, following a sharp rise in global fertilizer prices triggered by the West Asia conflict.

The Department of Fertilizers, GAIL, RCF, Fertilizers Corporation of India, Assam Valley Fertilizer and Chemical Company, Oil India, National Fertilizers and Brahmaputra Valley Fertilizer Corporation had not responded to email queries sent on 12 October by the time of publication.

Two domestic projects

Talcher Fertilizers Ltd, promoted by GAIL, Rashtriya Chemicals & Fertilizers Ltd, Coal India Ltd and Fertilizers Corp. of India Ltd, is setting up a greenfield urea plant in Odisha with annual capacity of 1.27 mt using coal gasification.

Coal India said in response to a Mint query that the project's estimated cost is ₹19,000 crore and that it is expected to be completed in fiscal year 2028 (FY28).

Assam Valley Fertilizer and Chemical Company Ltd, promoted by the Assam government, Oil India Ltd, National Fertilizers Ltd, HURL and Brahmaputra Valley Fertilizer Corporation Ltd, is also setting up a 1.27 mt-a-year plant in Assam.

Ravi Kota, chief secretary of Assam, confirmed the proposed capacity in an email response to Mint, putting the estimated project cost at about ₹10,600 crore. He said the plant was expected to become operational within 48 months of the zero date, tentatively during FY31. HURL said in an email that the project was expected to become operational by December 2030.

A separate proposed venture involving Russia's JSC UralChem could also help secure supplies. On 5 December last year, the central government said in a press release that a memorandum of understanding had been signed between UralChem, Rashtriya Chemicals and Fertilizers Ltd, National Fertilizers Ltd and Indian Potash Ltd. The agreement was signed in New Delhi in the presence of Russian President Vladimir Putin and Prime Minister Narendra Modi.

The proposed project, to be located in Togliatti in Russia's Samara region, involves urea manufacturing capacity of around 2 mt a year.

Not enough

Higher domestic production could reduce import dependence and exposure to global price swings, but experts say India also needs to address how efficiently fertilisers are used.

“While the government’s initiatives to strengthen the supply side of urea are welcome, equal attention must be given to demand management. Promoting balanced fertilizer use and improving nutrient-use efficiency are essential to address the growing demand sustainably,” said Sachchida Nand, visiting professor at the Indian Council for Research on International Economic Relations (Icrier).

The fiscal stakes remain substantial. India's fertilizer subsidy expenditure crossed ₹2.17 trillion in FY26, while the government had budgeted ₹1.77 trillion for the year. Amid rising prices linked to the West Asia crisis, the Department of Fertilizers had earlier sought a 100% increase in the subsidy allocation, to ₹3.5 trillion.

Subsidy projections have since moderated following a decline in fertilizer prices and India's efforts to build adequate inventories to meet near-term demand.

Global urea prices rose from $447 per tonne in February 2026 to $510 in March, after the conflict erupted on 28 February. Prices surged further to $772 in April and peaked at $947 in May, before easing to $447 per tonne in July, according to fertilizer ministry data.

About the Author

Vijay C. Roy is a journalist with over 21 years of experience covering various news beats across different organisations such as Business Standard and The Tribune. In the past, he has covered beats such as finance, auto, MSME, commodities, FMCG, pharmaceutical, agriculture, IT/ITES, infrastructure and start-ups. He joined Mint in February 2025, and covers agriculture, food processing, fertilizers, environment and climate change, bringing over two decades of experience reporting on farm policy, food inflation, crop trade, and rural livelihoods.<br><br>Vijay’s areas of reporting include food security and climate change policies, focusing on their impact on different stakeholders and their implications. His expertise lies in simplifying complex agri-economic issues such as edible oil import dependence, cotton and wheat trends, fertiliser subsidies, and climate-related risks. He has covered key developments including global supply disruptions and evolving trade policies, offering both macroeconomic perspective and field-level context. Known for his credible and balanced reporting, he follows a rigorous, fact-based approach that prioritises accuracy and context. He is driven by a commitment to public interest, aiming to make critical agricultural and economic issues accessible while contributing to informed policy and industry discussions.