India approves NIPU‑2026 urea investment policy to boost self‑reliance

The Union Cabinet approved the National Investment Policy for Urea (NIPU‑2026), authorising eight to nine new gas‑based urea plants with a combined capacity of about 10 million tonnes. The measure aims to close India’s annual production gap – roughly 30 million tonnes produced against a domestic demand of 40 million tonnes – and end reliance on imports of about 10 million tonnes. The policy updates the 2012 framework by separating fixed and variable costs, introducing a 12‑16 % return‑on‑equity band and converting fixed costs to rupees after four years to shield projects from foreign‑exchange volatility, which is projected to save more than ₹250 crore per plant.

The cabinet also cleared infrastructure projects worth over ₹29,300 crore, including two major highway corridors in Varanasi and railway capacity expansions in Odisha and Jharkhand, to improve logistics for the fertilizer sector. The initiative is presented as a step toward self‑reliant urea production amid rising domestic demand (about 5 % per year) and global supply uncertainties linked to the West Asia crisis.