To step up the annual fertiliser output by 30% (six million tonne), the government is working on a long-term pricing and investment policy.
The government is, in fact, planning to rope in the private sector to set up new projects and revive sick public sector undertakings. Long-term offtake tie-ups in West Asia and North Africa will be sewed up to take advantage of the cheaper feedstock, a senior official in the fertiliser ministry told FE.
The government is also considering suitable fiscal concessions such as bilateral government negotiations, double taxation agreements for domestic producers. These initiatives may help cut the country?s import bill, which stood at $1.25 billion last fiscal.
Various policy initiatives and models of cooperation with resource-rich countries were explained by the fertilisers secretary JS Sarma at a recent meeting. On its part, department of fertilisers (DoF) highlighted the projected increase in demand of fertilisers by 2012 and the consequent need to increase the indigenous production. The DoF too stressed the need to establish joint ventures with resource-rich countries.
As a prelude to this, the government has already eased existing plants of bottlenecks to add a three-million tonne capacity and 10 naphtha-based plants will be converted into plants, based on feedstock gas which is less expensive.
Similarly, a proposal for revival of eight sick units of Fertiliser Corporation of India (FCI) and Hindustan Fertiliser Corporation (HFC) through private participation has already been cleared. Under the proposed plan, direct government fundings will go a long way to do away bottlenecks. On foreign joint ventures, it has been decided that department should concentrate on Saudi Arabia, Kuwait and Qatar in the Gulf region, Nigeria, Angola and Mozambique for potash.