India fertilizer capacity expansion

In July 2026 the Indian 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 policy aims to close the roughly 30 million‑tonne production gap against a 40 million‑tonne domestic demand, reducing reliance on imports of about 10 million tonnes. It revises the 2012 framework by separating fixed and variable costs, setting a 12‑16 % return‑on‑equity band and converting fixed costs to rupees after four years to mitigate foreign‑exchange risk, projected to save more than ₹250 crore per plant. The cabinet also cleared infrastructure projects worth over ₹29,300 crore to improve logistics for the fertilizer sector.

Later that month, a GlobalData forecast projected that India will contribute more than 15 % of worldwide ammonia capacity additions through 2030, making it the second‑largest builder after the United States. Six new ammonia projects are slated for completion before the decade’s end, including the Reliance Industries Jamnagar Ammonia Plant (expected 2030) and other plants in Tamil Nadu, Odisha, and West Bengal. The expansion is driven by the need to secure fertilizer supplies for food security, reduce import dependence, and support India’s net‑zero emissions targets through green ammonia production.

Together, these policies and investment plans signal a coordinated push to boost domestic fertilizer and ammonia production, enhance supply security, and align the sector with broader economic and environmental goals.