India is preparing to set up its first urea manufacturing facility in Russia to secure long-term fertiliser supplies and reduce exposure to global price shocks, people familiar with the discussions told Economic Times.
The proposed project, backed by Rashtriya Chemicals and Fertilisers (RCF), National Fertilisers Ltd (NFL) and Indian Potash Ltd (IPL), aims to tap Russia’s abundant reserves of natural gas and ammonia, key raw materials that India lacks.
Officials said the venture could be announced during Russian President Vladimir Putin’s visit to India in December, marking a major new chapter in India–Russia economic cooperation.
State firms, potash player sign NDAs with Russian partners
According to Economic Times, RCF, NFL and IPL have already signed non-disclosure agreements (NDAs) with Russian companies to begin groundwork for the project.
The facility is expected to produce over two million tonnes of urea annually, one of the people cited said. Negotiations are currently focused on land allocation, pricing for natural gas and ammonia, and transport logistics.
“We are seeing sincerity and alignment on both sides,” one person told Economic Times, adding that the discussions are progressing steadily.
The companies did not respond to queries, Economic Times noted. Moneycontrol could not independently verify the report.
Why Russia?
Russia’s vast gas and ammonia reserves make it a natural partner for India, which remains import-dependent for these feedstocks despite being one of the world’s largest fertiliser users.
By setting up a plant in Russia, India aims to shield itself from future price shocks and supply disruptions, especially after the turmoil of the last two years, when global trade restrictions and wars upended fertiliser markets.
Background: Fertiliser crunch exposed supply risks
The project follows a severe fertiliser shortage during this year’s kharif (monsoon) season, when China halted exports of urea and other soil nutrients.
The sudden freeze forced India to scramble for alternative supplies at significantly higher prices, straining the subsidy bill and sparking concerns about food production.
With a well-distributed monsoon, fertiliser demand has surged as farmers expanded acreage under nutrient-intensive crops such as maize. Demand is set to rise again in the rabi (winter) season, when wheat, one of the most nutrient-heavy crops, is sown.
Domestic capacity rising, but raw material gaps remain
India’s domestic urea output reached a record 31.4 million tonnes in FY24, helped by six new plants commissioned by Hindustan Urvarak & Rasayan Ltd (HURL), Chambal Fertilisers & Chemicals, Matix Fertilisers & Chemicals, and Ramagundam Fertilisers & Chemicals Ltd (RFCL).
The cabinet has also approved a new urea plant in Assam, estimated at Rs 10,601 crore, to strengthen eastern capacity.
However, India still depends on imports for raw materials such as natural gas and ammonia—making ventures like the one in Russia strategically vital.
India is currently the second-largest consumer and third-largest producer of fertilisers globally, but it remains vulnerable to global commodity swings.
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