Cabinet clears urea investment policy to boost local production

The Union Cabinet approved the National Investment Policy for Urea-2026 (NIPU-2026), replacing the 2012 policy.

The policy aims to establish 8-9 new gas-based urea plants, each producing about 12.7 lakh metric tonnes, to boost domestic production.

It separates fixed and variable costs for transparency and introduces a return on equity band of 12-16%.

Foreign exchange risk is reduced by converting fixed costs into rupees after four years based on prevailing rates.

The policy is expected to save over ₹250 crore per plant compared to the 2012 framework.