India Plans to Invest 2.04 Trillion Rupees in 17 Urea Projects to Expand Domestic Production Capacity

en.Wedoany.com Reported - On September 26, India's new round of urea industry investment plan had received applications for 17 projects, with potential investment scale reaching up to approximately 2.04 trillion rupees. Applicants include GAIL (India) Ltd, Hindustan Urvarak & Rasayan Ltd (HURL), KRIBHCO, Chambal Fertilisers and Chemicals Ltd, and Matix Fertilisers and Chemicals Ltd, among other enterprises. The relevant proposals are currently under review by India's Department of Fertilizers. The projects cover new urea plants as well as expansion of existing facilities, and are incorporated under the framework of India's National Investment Policy for Urea 2026 (NIPU-2026).

According to industry estimates, a standard-scale urea plant with a capacity of approximately 1.27 million tonnes per year requires capital expenditure of about 100 billion to 120 billion rupees; brownfield expansion of existing plants involves investment of approximately 90 billion to 100 billion rupees per project. Based on the 17 applied projects, the potential total investment is approximately 1.53 trillion to 2.04 trillion rupees. If the projects are approved successively and enter the construction phase, industry estimates suggest it typically takes about three years from commencement to achieving new production capacity.

The Indian government approved NIPU-2026 on July 15, focusing on attracting corporate investment in natural gas-based urea production facilities. The new policy separates fixed costs from variable costs for accounting purposes and sets a return on equity range of 12%–16%, while reducing investment uncertainty for long-term projects through an exchange rate risk handling mechanism. According to Indian government data, there are currently 33 operational urea production facilities nationwide, with total reassessed or installed capacity of approximately 26.942 million tonnes per year.

India's urea market still has significant demand for new production capacity. In fiscal year 2025–2026, India's domestic urea production was approximately 29.33 million tonnes; from April to August 2026, domestic urea production was approximately 12.54 million tonnes, a year-on-year increase of 4.4%, while imports during the same period increased from 2.04 million tonnes in the prior-year period to 4.75 million tonnes. On September 23, India also launched a tender for 1.7 million tonnes of urea imports, reflecting the continuing gap between domestic supply and agricultural fertilizer demand.