Last Updated on July 15, 2026 10:45 pm by BIZNAMA NEWS
By S. N. VERMA / NEW DELHI
In a landmark move toward achieving Atmanirbhar Bharat (Self-Reliant India) in the agriculture sector, the Cabinet Committee on Economic Affairs (CCEA) has officially approved the National Urea Investment Policy-2026. Proposed by the Department of Fertilisers, the policy is designed to catalyze fresh private and public investment to establish new, state-of-the-art gas-based urea production units across the country.
Bridging the Demand-Supply Gap
India currently hosts 33 operational urea units with a total production capacity of 269.42 lakh metric tonnes. Despite these robust figures, a persistent structural gap exists between domestic demand and indigenous supply, forcing the nation to rely on imports.
The 2026 policy replaces the long-expired 2012 investment framework, which had successfully facilitated the establishment of six new urea units—four via public sector joint ventures and two by private players. With the Department of Fertilisers already reporting a healthy pipeline of proposals for new plants, the government expects the new policy to provide the regulatory impetus required to rapidly scale domestic manufacturing and curb import dependency.
Key Reforms: A More Sustainable Framework
The 2026 policy introduces several strategic improvements over the 2012 model, focusing on investor confidence, transparency, and fiscal prudence:
- Assured Returns: To attract long-term capital, the policy guarantees a Return on Equity (RoE) ranging from a minimum of 12% to a maximum of 16%.
- Operational Transparency: The framework mandates a clear differentiation between fixed and variable costs, providing investors with greater clarity and predictability in their business models.
- Currency Risk Hedging: In a major relief for investors concerned about volatility, the policy includes a mechanism to convert fixed costs into Indian Rupees based on prevailing exchange rates after a four-year period, effectively insulating long-term investments from foreign exchange fluctuations.
Fiscal Impact and Long-term Vision
The government expects these strategic reforms to deliver significant cost efficiencies. According to initial estimates, each new plant established under the 2026 policy will result in a saving of over ₹250 crore compared to the legacy framework.
By institutionalizing these rules for all future urea manufacturing, the Ministry aims to accelerate the transition toward total self-sufficiency. As these new plants come online, they are expected not only to secure the nation’s fertilizer supply chain but also to provide Indian farmers with more reliable access to essential agricultural inputs, ultimately strengthening the country’s long-term food security and economic diplomacy.