Fertilisers are crucial for agricultural productivity and food security. India is the second-largest consumer and third-largest producer of fertilisers globally, yet the sector faces structural challenges such as high import dependence, distorted subsidy policies, and environmental concerns.
Key issues in India’s fertiliser sector:
1. Import dependence:
- India imports 95% of its phosphate requirement and 100% of potash due to lack of domestic reserves.
- Fertiliser inputs like ammonia and sulphur are over 80% imported from Gulf countries.
2. Imbalanced fertiliser use:
- India’s N : P : K ratio is highly skewed, far from the recommended 4:2:1 ratio, mainly due to subsidised urea.
- Overuse of nitrogen causes soil nutrient depletion and micronutrient deficiency.
3. Rising fiscal burden:
- Fertiliser subsidy is the second-largest subsidy after food, accounting for over 10% of central expenditure.
- Subsidy bill may cross ₹2 lakh crore in FY27, driven by global price volatility and gas import costs.
4. Structural Issues:
- 27 of 33 urea plants are older than 25 years, leading to inefficient production.
- Dependence on foreign process technology increases costs and vulnerability.
5. Environmental impact: Excess fertiliser uses leads to water contamination, soil degradation, and greenhouse gas emissions.
Reforms needed:
1. Strengthen domestic production: Implement New Investment Policy (NIP), 2012 and revive closed fertiliser plants to reduce import dependence.
2. Rationalise subsidy framework: Expand Nutrient Based Subsidy (NBS) and consider Direct Benefit Transfer (DBT) to farmers to promote balanced fertiliser use.
3. Promote sustainable fertilisers: Encourage nano fertilisers, neem-coated urea, bio-fertilisers, and schemes like PM-PRANAM.
4. Improve monitoring: Use digital systems like Integrated Fertilizer Monitoring System (iFMS) to prevent diversion and black marketing.
Conclusion:
A combination of domestic capacity expansion, subsidy rationalisation, and sustainable fertiliser practices will be essential to secure India’s long-term food security and agricultural sustainability.
‘+1’ Value Addition:
- Agriculture supports 46% of India’s population and contributes ~16% to GDP.
- Private sector accounts for 57% of fertiliser production (2023-24), while PSUs contribute only 25% of urea production.
- One 500 ml bottle of nano urea can replace a 45 kg bag of conventional urea, significantly reducing fertiliser consumption and logistics cost.
- PM-PRANAM Scheme incentivises states to reduce chemical fertiliser consumption by promoting alternative and balanced nutrient usage.
- One Nation One Fertiliser (ONOF): Under PMBJP, all subsidised fertilisers are sold under the ‘Bharat’ brand (Bharat Urea, Bharat DAP etc.) to ensure uniform quality and reduce marketing costs.
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Fertiliser Sector Reforms