India’s urea deficit estimated at 11 MT by 2016-17

A study by industry body Fertilizer Association of India has anticipated that the demand supply gap of urea will rise 11 million tonnes (MT) by 2016-17. Currently, India produces 22 MT tonnes while the consumption is around 28 MT, the shortfall of 6 MT is covered through imports. Thus, it is essential to construct new urea plants which can fill the gap of estimated 11 MT.

Till 2001-02, India had adequate production of the key fertilizer, however, with the rising consumption and lack of major investment, led to the demand-supply gap which is widening now.

In order to infuse more capital in the urea sector considering the high cost of capital, a contributing policy is essential.  According to the planning commission for 12th five year plan (2012-17), India needs to invest Rs 40,000 crores in the sector to increase the production capacity to 33.7 million tonnes by the end of 12th five year plan.