Modi govt set to divest top fertiliser companies next fiscal: Report

The government aims to reduce its reliance on imported fertilisers and become self-sufficient before selling these companies. (Photo:Pixabay)

The Centre is planning to restart the sale of state-owned fertiliser companies next fiscal year, a report by ‘The Mint’ said on Monday. The report said that the development comes as the Modi government aims to boost domestic production and cut down on imports. The plan includes putting eight major public sector fertiliser companies up for sale gradually. Additionally, some closed plants may be reopened and prepared for sale.

The eight fertilizer companies that may be put on the block are Brahmaputra Valley Fertilizer Corp Ltd, Fertilizers and Chemicals Travancore, FCI Aravali Gypsum and Mineral Ltd, Madras Fertilizers Ltd, National Fertilizers Ltd, Rashtriya Chemicals & Fertilizers, Fertilizer Corp, the Mint report said. India Ltd, and Hindustan Fertilizer Corp. Ltd. Certain units of Fertilizer Corp. located in Gorakhpur, Sindri, Talcher, and Ramagundam are also on the list for sale.

The plan is still under discussion, and a final decision will be made soon, the report said. Back in 2022, Niti Aayog had recommended selling these eight fertiliser companies, but the government postponed the plan to focus on increasing domestic production.

The government aims to reduce its reliance on imported fertilisers and become self-sufficient before selling these companies. It hopes to cut urea imports by 30% by the end of 2024. The fertiliser subsidy has been reduced from Rs 1,88,894 crore in FY24 to Rs 1,64,000 crore in FY25. However, the sale of stakes in these companies will not affect subsidy payments.

Experts say efforts to revive old plants and establish new ones have been successful, with domestic production up by 20% to 31.4 million tonnes and imports down by at least 10% in FY24. According to Chirag Jain from Grant Thornton Bharat LLP, these initiatives have helped bring attention to the industry, improve efficiency, and potentially make these companies profitable.

In FY24, India imported 7.04 million tonnes of urea worth $2.61 billion, down from 7.57 million tonnes in FY23. The country, which mainly imports urea from Oman, Qatar, Saudi Arabia, and the UAE, plans to stop importing urea completely by FY26.