Govt clears new investment policy for urea sector

India's Cabinet Committee on Economic Affairs approved the National Investment Policy for Urea-2026 (NIPU-2026) to attract fresh investments in domestic urea manufacturing.

NIPU-2026 replaces the 2012 policy and encourages setting up gas-based urea plants to reduce India's dependence on imported fertilisers.

The policy separates fixed and variable costs, introduces a 12-16% return on equity band, and converts fixed costs to rupees after four years to reduce foreign exchange risk.

India has 33 operational urea units with a total capacity of 26.94 million tonnes annually, but domestic production falls short of demand.

The new policy aims to save over ₹250 crore per plant compared to the 2012 policy and support future capacity expansion.