As India gears up to ramp up production of nano-fertilisers, questions arise regarding the technical feasibility and logistical implications of transition Recently, the Union Minister for Chemicals and Fertilisers Mansukh Mandaviya stated “Consumption of urea this fiscal is likely to be 8 percent less than in FY 2022-23 due to the use of its liquid nano variant. Because of this and higher domestic production, import of urea, the soil nutrient that accounts for 70 per cent of the fertiliser subsidy bill, declined more than a fifth on year in 2023. Further spread of nano urea consumption and t ..read more

The fact is that non-urea fertilisers, in practice, have consistently remained under regulatory control In an office memorandum dated January 17, 2024, the Department of Fertilisers (DoF) has issued detailed guidelines for the evaluation of “reasonableness” of the MRPs (maximum retail price) for all non-urea fertilizers covered under the Nutrient Based Scheme (NBS). To be effective from April 1, 2023, the guidelines prescribe maximum profit margins that will be allowed for fertilizer companies – 8 per cent for importers, 10 per cent for manufacturers and 12 per cent for integrated manufacturer ..read more

When the government spends heavily from its budget to make fertilisers available to farmers at a fraction of their cost, it seems senseless to tax them or the RMs used for making them. The Standing Committee on Chemicals and Fertilisers has recommended that the Centre propose to the GST Council to reduce tax rates on fertilisers from the current 5%. It has also sought a reduction in GST on raw materials (RMs) used in the making of fertilizers. Currently, RMs such as sulfuric acid and ammonia are levied 18% GST, while phosphoric acid attracts 12%. The present structure of taxing fertilisers an ..read more

The cost of making fertilisers available to farmers by itself is substantially higher than the price the Govt wants them to pay, ideally, it should not levy any tax In its report laid in Parliament on August 9, 2023, the Standing Committee on Chemicals and Fertilizers has recommended that the Union Government should propose to the GST Council to reduce tax rates on fertilizers from the current 5 per cent. Initially, fertilizers were placed under the 12 per cent slab. However, following representation made by various states, the tax rate was reduced to 5 per cent. Now, the Committee wants this ..read more

Potash (K), and phosphate (P) are among the three major plant nutrients (the third being nitrogen or ‘N’) needed for increasing the production of foodgrains and other agricultural products. Their requirements are met mostly from imports. A farmer sprinkles fertiliser on paddy crop in Koppal district. The enactment of two laws, viz. the Mines and Minerals (Development and Regulation) Amendment Act, 2023, and the Offshore Areas Mineral (Development and Regulation) Amendment Act, 2023, in the monsoon session of Parliament bodes well for the Indian fertiliser sector. While the first ..read more

The government must pursue indigenous sources of fertiliser raw materials to minimise India’s vulnerabilities on imports The enactment of two laws viz. The Mines and Minerals (Development and Regulation) Amendment Act, 2023 and the Offshore Areas Mineral (Development and Regulation) Amendment Act, 2023 in the just concluded monsoon session of the parliament bodes well for the Indian fertilizer sector. While the first law paves the way for the auction of critical mineral potash (besides lithium and graphite) blocks for exploration and processing in India, the second provides a fixed 50-year pro ..read more

The government has rightly emphasised the need for shifting away from chemical fertilisers, reducing imbalance in nutrient use and rejuvenating the soil. But this won’t be possible till the existing policy framework is changed The announcements on urea perpetuate their use by emphatically stating that the extant pricing and subsidy policies will continue. The Union government made three major policy announcements on June 28, 2023 — continuation of the urea subsidy scheme up to 2025-26 with an outlay of Rs 3.68 lakh crore, continued availability of urea to the farmers at the maximum retail pric ..read more

Instead of pumping more subsidies the Government should push for nano fertilisers which are efficient and cost-effective The Union Minister of Health and Family Welfare and Chemicals and Fertilizers Mansukh Mandaviya has stated that during 2023-24, around Rs 46,000 crore would be needed for fertilizer subsidy payments over and above Rs 175,000 crore being the budget estimate (BE) given by the Finance Minister Nirmala Sitharaman in the budget presented on February 1, 2023. On the other hand, the Ministry of Finance (MoF) feels, payments could be even less than BE. Fertilizer subsidy is payments ..read more

Nano fertilisers can yield better results but they can’t perform miracles. For a substantial reduction in subsidy, the Govt must implement agri reforms On April 26, 2023, Union Minister for Home and Cooperatives Amit Shah launched liquid nano-diammonium phosphate (nano-DAP) developed by the Nano Biotechnology Research Centre (NBRC) (Kalol) of Indian Farmers Fertiliser Cooperative (IFFCO). During the current fiscal, IFFCO plans to produce 50 million bottles (500 ml) of nano-DAP which will be scaled up to 180 million bottles by 2025-26. According to US Awasthi, Managing Director of IFFCO, by the ..read more

Routing the subsidy through manufacturers and keeping the selling price of fertilisers artificially low, makes diversion of subsidised fertilisers profitable for dubious players The availability of fertilisers at an ‘artificially’ low price is very tempting to all stakeholders in the supply chain. (File image) About 41 percent of fertiliser subsidy is diverted to non-agricultural uses including smuggling to neighbouring countries, 24 percent is consumed by larger farmers and another 24 percent is spent on inefficient producers, the Economic Survey 2015-16 noted. That essentially means that ju ..read more