MUMBAI: India is likely to become an exporter of urea by 2030, as GoI is giving incentives to manufacturers to increase capacities in order to eliminate imports, according to a report
In order to double farmers’ income by 2022, the production of fertilisers will have to be increased as it will help in the productivity of land and farm produce, Care Ratings said in its report.
According to the New Urea Policy, manufacturers are incentivised to produce more than the reassessed capacity of the plant, it added.
“We also believe that with the newer capacities of urea plants being added and old defunct ones revived, India could not only achieve its aim of eliminating urea imports but could possibly also become an exporter in the future by 2030,” the report said.
Import dependence (imports as a proportion of production plus imports) came down from 26.3 per cent in to 18.5 per cent in FY17, while the share of domestic production increased from 73.7 per cent to 81.5 per cent during this period indicating that India is moving towards self-sufficiency of urea production, it said.
Presently India mainly imports Urea from China, Oman and Iran, it said.
The government also has planned to clear the fertiliser subsidy backlog before the implementation of the direct benefit transfer (DBT) scheme next year.
This backlog subsidy is estimated at Rs 35,000 crore and the payment delays has impacted the working capital situation for the concerned companies affecting their finance costs and profits, it said.
The main challenge will be to make sure the new system works before implementation of the scheme, it added.