A parliamentary panel has strongly criticized the classification of the fertilizer sector as "Non-Strategic," arguing that this categorization is misaligned with the Atmanirbhar Bharat (self-reliant India) goals. The committee's report highlights the critical role of the fertilizer industry in ensuring food security and supporting the agricultural sector, which sustains a significant portion of the Indian population.
Under the new public sector enterprise policy for Atmanirbhar Bharat in 2021, the fertilizer sector was categorized as a non-strategic sector, making it eligible for privatization or closure. However, the parliamentary panel has raised concerns that this classification undermines the government's efforts to promote self-reliance in fertilizer production and reduces import dependence. The panel also noted that there has been no progress so far as disinvestments of seven PSUs manufacturing fertilisers is concerned.
Prime Minister Narendra Modi has also stressed the urgent need to produce fertilizers domestically to empower farmers and protect national food security. He has expressed concern over India's dependence on fertilizer imports, which results in a significant outflow of foreign exchange. Modi urged farmers to use fertilizers judiciously to protect soil health and reduce domestic requirements and also called upon youth and industry to make India self-sufficient in the fertilizer sector by enhancing domestic production for adequate supplies.
The government provides substantial subsidies to ensure that farmers receive urea, di-ammonium phosphate (DAP), and other fertilizers at reasonable rates. In the fiscal year 2024-25, the fertilizer subsidy stood at Rs 1,77,129.50 crore. Despite these subsidies, India's import of urea was 56.47 lakh tonnes in 2024-25, compared to 70.42 lakh tonnes in 2023-24. Similarly, DAP imports were 45.69 lakh tonnes in 2024-25, against 55.67 lakh tonnes in the previous fiscal year.
To address the issue of import dependence, the government has been promoting the use of alternative fertilizers, including organic fertilizers, bio-fertilizers, and bio-stimulants, which are derived from natural sources and have minimal environmental impact. The government has also encouraged the development of innovative fertilizer formulations that incorporate micronutrients, secondary nutrients, and growth-promoting substances tailored to specific crop requirements.
In addition, the government has been supporting research and innovation in the fertilizer sector to drive product diversification. This includes investments in agricultural research institutions, collaboration with industry experts, and the establishment of research and development centers.
However, grassroots associations have pointed out that the current fertilizer policy undermines "Atmanirbhar Bharat" and favors foreign players. They argue that Indian startups face regulatory hurdles, such as the need to obtain multiple licenses and maintain offices and warehouses in every state where the fertilizer is to be distributed. In contrast, importing from foreign suppliers involves minimal compliance.
To promote self-reliance in the non-subsidized fertilizer sector, industry experts have suggested implementing "One Nation, One License," ensuring parity with foreign manufacturers, capping inspector numbers, and enacting a new law for non-subsidized fertilizers outside the Essential Commodities Act.
The Department of Fertilizers has also warned fertilizer manufacturers against tagging non-subsidized products, such as pesticides and nano-based crop nutrients, with subsidized fertilizers like urea and DAP. The department has stated that such practices put an undue financial burden on farmers and violate the Essential Commodities Act, 1955, and the Fertilizer Control Order, 1985.
