The country's fertiliser manufacturing capacity, which has remained stagnant for a decade, is poised to shoot up by 75 per cent to 35 million tonnes as top companies, along with petrochemicals and oil exploration behemoth Reliance Industries, have lined up investments worth Rs 35,000 crore (Rs 350 billion).
The plan is to make India, which now imports urea, "a urea manufacturing hub, where we can also hope to become an exporting country", said an official in the department of fertilisers.
RIL has shown interest in setting up two plants of 2 mtpa each in Andhra Pradesh and Gujarat. The investment in these is likely to be about Rs 12,000 crore (Rs 120 billion).
According to officials, Indian Farmers Fertiliser Cooperative (Iffco) and Hyderabad-based VBC Industries are also planning to set up new plants in Andhra Pradesh. VBC has already acquired land for the plant.
Rashtriya Chemicals and Fertilisers (RCF) and Kribhco are looking to expand their existing capacities. In addition to this, public sector companies are to revive five other units that will add 5 mtpa capacity.
"At least 10 proposals for new plants and expansion of existing plants have been received," the official said.
All of these plants will be fired by gas. "As we see it, gas will be made available to the fertiliser plants. The prime minister has also said that gas should be supplied to fertiliser plants on a priority basis," the official said.
The current interest in capacity expansion is partly driven by the government's plans for a new investment policy that would offer financial incentives. It had recently dispensed with the need for prior permission to augment the capacity of existing urea manufacturing plants.
The ministry, which has completed its informal discussions with the fertiliser industry, is in the process of preparing a draft policy for fiscal investments.
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