National Investment Policy for Urea-2026 Approved

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The **Cabinet Committee on Economic Affairs (CCEA)** recently gave its approval to the **National Investment Policy for Urea-2026 for Atmanirbhar Bharat (NIPU-2026)**.
This new policy focuses on setting up modern gas-based urea factories to boost local manufacturing, cut down foreign imports, and protect India's national fertilizer security.

The government plans to support the setup of **8-9** new gas-based urea manufacturing units in different regions of the nation.
Every new facility will yield roughly **12.7 lakh metric tonnes** annually, which together will add **10 million tonnes** to total domestic production.
This updated framework introduces structural improvements over the previous **New Investment Policy (NIP)-2012** to build a modern production system.
It splits fixed expenses from operational costs while calculating subsidies, making accounting far more transparent.
Investors get guaranteed profit margins through a fixed **Return on Equity (RoE)** range, with a minimum of **12%** and a maximum capped at **16%**.
The policy protects investors from currency rate fluctuations by converting fixed costs into **Indian Rupees (INR)** after **4 years** using current currency rates.
Unlike the older **NIP-2012** scheme that funded plant upgrades and revivals, **NIPU-2026** focuses specifically on constructing brand-new gas-based urea plants.
These policy changes will lower expenses and save more than **Rs. 250 crore** for every new manufacturing plant compared to older rules.
Private companies, state-run public sector units, and cooperative enterprises will all receive the exact same government support and financial incentives.

Farmers across the country rely heavily on urea, causing national demand to rise by nearly **5%** every year.
India consumes nearly **40 million tonnes** of urea every year, but **33** domestic plants produce only about **30 million tonnes**, leaving a gap of **10 million tonnes** that must be imported.
By adding **10 million tonnes** of fresh local production, the new policy helps end import reliance and makes India self-reliant.
The previous government policy, **NIP-2012**, which helped establish **6** new production units, came to an end in **October 2019**.
The **Department of Fertilizers** received many new business proposals, creating a clear need for an updated guidelines framework.
Depending heavily on imported urea and foreign **Natural Gas (LNG)** leaves Indian agriculture vulnerable to sudden international supply disruptions.
Any conflict or blockages in vital sea routes like the **Strait of Hormuz** can surge raw material prices and put national food security at risk.

Urea, represented chemically as **NH₂CONH₂**, is a white crystalline organic compound that serves as the main source of nitrogen for crops.
It contains around **46%** nitrogen, which is the highest concentration among all solid fertilizers, making it essential for key crops like wheat, paddy, and sugarcane.
The central government heavily subsidizes this fertilizer so that farmers can buy it at low, affordable rates.
While non-urea fertilizers are managed under the **Nutrient Based Subsidy (NBS)** program, the **Maximum Retail Price (MRP)** of urea is strictly set by government law.

The government made **100% Neem Coated Urea (NCU)** mandatory to make nitrogen absorption slower in soil and stop subsidized urea from being diverted to factories illegally.
Authorities introduced **Urea Gold**, a sulfur-coated variant that cures sulfur deficiency in farmland and improves agricultural output.
Created by **IFFCO**, **Liquid Nano Urea** is sprayed directly onto plant leaves, greatly cutting down the need for traditional heavy bags of fertilizer.
The **PM PRANAM** scheme rewards states and union territories financially when they reduce chemical fertilizer consumption and adopt organic alternatives.
Under the **Pradhan Mantri Bhartiya Jan Urvarak Pariyojana**, all subsidized products are sold under the brand name **Bharat** through the **One Nation One Fertilizer** initiative to lower transport costs.