Prime Minister Narendra Modi’s Cabinet Committee on Economic Affairs (CCEA) has given its approval to the National Investment Policy for Urea-2026 (NIPU-2026), which opens the door for new investments in urea producing units that use gas. The policy’s goals are to speed up the fertiliser sector’s Atmanirbhar Bharat mission, make India less reliant on imports, and boost domestic urea production.
The recently passed policy is an improvement over the previous New Investment Policy (NIP)-2012 in a number of ways that are good for investors. Among these measures is a system to transfer fixed costs into Indian Rupees after four years in order to reduce exposure to foreign exchange risk; a Return on Equity (RoE) band of 12% to 16% is also included. Financial transparency, project viability, and long-term investment confidence are anticipated to be enhanced by these reforms.
The government claims that NIPU-2026 projects are anticipated to save around ₹250 crore in comparison to projects built under the previous strategy, for every new urea manufacturing facility that is set up. Better use of public resources and more engagement from both the public and commercial sectors are goals of the updated framework, which also seeks to streamline future fertiliser projects.
The 33 urea production facilities in India have an installed and appraised capacity of 269.42 lakh metric tonnes (LMT). Nonetheless, yearly imports amount to a large amount because domestic demand remains higher than local output. The NIPU-2026 strategy is well-timed to address the supply shortfall, strengthen fertiliser security, and lower India’s import bill, since the Department of Fertilisers has received multiple proposals for new plant establishments.
The National Investment Policy for Urea-2026 establishes a clear and financially sound investment framework, which is a major reform for the fertiliser business in India. The goal of the policy is to encourage domestic urea production, lessen dependency on imports, bring in new investments, and fortify India’s effort to become self-sufficient in fertiliser as part of Atmanirbhar Bharat.
Image: DD News
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