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India fertiliser sector to see up to Rs 90,000 crore capex push
India’s fertiliser sector is poised for a major investment cycle, with companies expected to commit between Rs 80,000 and Rs 90,000 crore in capital expenditure over the next six months. This surge is driven by the government’s New Investment Policy for Urea-2026 (NIPU-2026), which aims to expand domestic urea production capacity and reduce reliance on imports.
In the 2025-26 period, India’s domestic urea production capacity stood at approximately 30.6 million tonnes per annum, while demand reached nearly 39.9 million tonnes, resulting in an import dependency of about 27 per cent. The new capacity is expected to improve self-sufficiency, with significant impacts projected from 2030-31 as new facilities become operational. Projects under the new policy are anticipated to be commissioned within 3.5 to 4 years.
Rating agency ICRA noted that while the NIPU-2026 policy provides a narrower return on equity range of 12-16 per cent—compared to 12-20 per cent under previous policies—debt-servicing indicators and project returns are expected to remain comfortable. The expansion is also anticipated to benefit allied industries, including gas transmission, LNG terminals, and engineering services. For instance, each new 1.27 million tonne capacity plant is estimated to increase natural gas demand by approximately 2.2 million standard cubic metres per day.
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- [● 2 SOURCES] India's urea import dependency was approximately 27 per cent in 2025-26. businessnewsthisweek.com · www.chinimandi.com
- [● 2 SOURCES] New urea plants are expected to be commissioned within approximately 3.5 to 4 years. businessnewsthisweek.com · www.chinimandi.com
- [● 2 SOURCES] The investments are driven by the New Investment Policy for Urea-2026 (NIPU-2026). businessnewsthisweek.com · www.chinimandi.com
- [● 2 SOURCES] A new 1.27 million tonnes capacity urea plant is estimated to increase natural gas demand by 2.2 million standard cubic metres per day. businessnewsthisweek.com · www.chinimandi.com
- [● 2 SOURCES] India’s fertiliser companies are expected to commit between Rs 80,000 and Rs 90,000 crore in capital expenditure over the next six months. businessnewsthisweek.com · www.chinimandi.com
- [● 2 SOURCES] The return on equity range under NIPU-2026 has been revised to 12-16 per cent, down from 12-20 per cent under the previous policy. businessnewsthisweek.com · www.chinimandi.com