Urea-makers will now get incentive to produce; govt pledges this to curb urea imports

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March 13, 2020 5:47 PM

Urea factories that are older than 30 years but are still producing urea, will get Rs 500 additional fixed cost.

urea, fertilizer, urea producton, fertilizer production, imports, exports, trade Every year, India imports more than 50 lakh tonnes of urea, worth more than a billion dollar. (Bloomberg image)

Urea manufacturers will now get benefits from the government to produce more. The government has today announced benefits for the urea manufacturing companies. 30 urea factories will get fixed cost at a rate of Rs 350 per metric tonne, Cabinet Minister Prakash Javadekar said in a cabinet press briefing. He also announced that a few urea factories that are older than 30 years but are still producing urea, will get Rs 500 additional fixed cost. India imports more than 50 lakh tonnes of urea, worth more than a billion-dollar, every year. To reduce the weight of this import, the government has been consistently trying to boost domestic production and cut the imports.  

“The average total production of urea in the country of the last three years is 241 LMT and the total consumption stood nearly 305.48 LMT in the same duration. The gap is fulfilled through imports. In the last 3 years, the average imported urea is 63.12 LMT and the average expenditure is Rs 12,797.31 crores,” D V Sadananda Gowda said in a reply to a question in Lok Sabha.

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In addition to the above announcement, the government is also reviving five closed fertilizer plants of Fertilizer Corporation of India Limited (FCIL) and Hindustan Fertilizer Corporation Limited (HFCL) namely Talcher, Ramagundam, Gorakhpur and Sindri plants of FCIL and Barauni plant of HFCL. This revival will be done by forming Joint Venture companies of nominated PSUs for setting up new area ammonia plants of 12.7 lakh metric tonne per annum capacity each, according to a statement by the Ministry of Chemicals and Fertilizers.

Meanwhile, the government has also set up strict compliance to curb illegal and sub-standard sales of urea in the country. According to the restrictions, no person shall sell or distribute any fertilizer which is not of the prescribed standard. Also, the samples of fertilizers are drawn periodically by the fertilizer inspectors of the state governments from retailers, wholesalers, and manufacturing units for testing in the notified laboratories to check their quality.

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