Finance Ministry aims to cut urea import bill by one-third in FY25

In the current fiscal year, the urea import bill is likely to touch Rs 31,000 crore

The Finance Ministry expects the urea import bill to substantially reduce by one-third to Rs 21,000 crore in 2024-25 owing to the Centre’s push for the use of nano urea, urea gold, etc., which will help contain the total fertiliser subsidy next year, a government official said.

In the current fiscal year, the urea import bill is likely to touch Rs 31,000 crore.

“Next year import of urea will be less. In the current year, the government spent Rs 31,000 crore on urea imports. Market Development Assistance (MDA) and nano urea are being promoted. In the case of urea, alternatives like nano urea and organic fertilisers and manures are there. So the Finance Ministry is likely to allocate Rs 20,000-21,000 crore for urea imports in FY25,” the official told Moneycontrol.

Urea contributes 55-60 percent of the total fertiliser consumption, which is met via imports and indigenous production.

The urea subsidy scheme ensures constant availability of urea to the farmers at the same price of Rs 242 per 45 kg bag excluding taxes and neem coating charges. The actual cost of the bag is around Rs 2,200.

Alternatives to urea

The Union Cabinet on June 28, 2023, approved a bouquet of schemes to boost the well-being of farmers, rejuvenate soil productivity, and ensure food security and environmental sustainability. Under the liberalised Market Development Assistance scheme which promotes composting in cities, the total outlay is Rs 1,451 crore over three years, including FY24.

The scheme promotes the use of alternative fertilisers by exemplifying a model of wealth from waste and organic manure from Gobardhan plants to be used to enrich the soil and keep the environment safe and clean.

Nano urea eco-system strengthened

Liquid nano urea, a nitrogen fertiliser, is cheaper and more efficient and is likely to lower imports of granular urea substantially. Liquid nano urea, developed using nanotechnology, can improve the efficiency of crop nutrients. By 2025-26, eight Nano urea plants with a production capacity of 44 crore bottles equalling 195 lakh metric tonnes (lmt) of conventional urea will be commissioned.

Urea gold

Another initiative is sulphur-coated urea (Urea Gold), which is more economical and efficient. It will save input costs for the farmers and also raise incomes for farmers along with enhanced production and productivity.

Urea manufacturing

Setting up and revival of six urea production units at Chambal Fertiliser in Rajasthan, West Bengal, Telangana, Uttar Pradesh, Jharkhand and Bihar is helping to increase the capacity of urea production and availability in the country. Indigenous production of urea has increased from the level of 225 lmt during 2014-15 to 250 lmt during 2021-22. In 2022-23, production capacity has increased to 284 lmt. These initiatives are likely to reduce import dependency on urea in FY25.