The effort is aimed at cutting the use of chemical fertilisers, while also improving crop yields and saving on subsidies.
According to the policy, interested private companies are required to give a bank guarantee of Rs 300 crore for every project, while PSUs firms have been exempted from it.
The fertilizer ministry is likely to send the new urea policy proposing a 10% hike in prices to the Cabinet for approval by next week, say CNBC-Tv18 sources.