Follow Us:
Tuesday, August 16, 2022

Five new plants coming by 2023, first atmanirbhar boost may be in urea

Four new urea plants will be commissioned before 2021, and a fifth is expected in 2023. The lumpsum turnkey execution contract for the fifth plant has, incidentally, been awarded to the Chinese state-owned firm Wuhuan Engineering.

Written by Harish Damodaran | New Delhi |
Updated: July 13, 2020 6:58:16 am
india farmers, urea, urea price, modi atmanirbhar mission, urea subsidy, urea plants, urea for farmers, soil helath card, indian express In 2019-20, India imported a record 11 million tonnes (mt) of urea valued at $ 2.89 billion — in which China’s share was over 2.9 mt, worth $ 854.56 million. Although lower than the high of 6.4 mt ($ 1.98 billion) in 2014-15, it was above the 0.8 mt ($ 235.74 million) for 2017-18. (File)

Urea could be the first big-ticket item where the Narendra Modi government is set to realise its plans of ‘atmanirbharta’ (self-reliance) and reducing dependence on Chinese imports, with the commissioning of four new plants before 2021. In addition, a fifth plant is expected in 2023, for which the lump-sum turnkey execution contract has, incidentally, been awarded to a Chinese state-owned firm Wuhuan Engineering.

India imported a record 11 million tonnes (mt) of urea, valued at $ 2.89 billion, in 2019-20. China’s share in that was over 2.9 mt, worth $ 854.56 million. Although lower than the high of 6.4 mt ($ 1.98 billion) in 2014-15, it was above the 0.8 mt ($ 235.74 million) for 2017-18 (see table).

“The five new units are of 1.27 mt per annum production capacity each. Once they, and three others currently shut or in the process of getting gas, are functional, we will become atmanirbhar in urea by 2023-24,” a top government official told The Indian Express.

The first of the five plants, at Ramagundam in Telangana, will be ready in October, just before the next rabi crop season. Being implemented by Ramagundam Fertilisers & Chemicals – a joint venture of National Fertilisers, Engineers India and Fertilisers Corporation of India Ltd (FCIL) – it is basically a revival project of a closed state-owned unit, similar to the others at Gorakhpur (Uttar Pradesh), Sindri (Jharkhand), Barauni (Bihar) and Talcher (Odisha).

Subscriber Only Stories
Explained: All about F-INSAS, Nipun mines, LCA — the new systems ha...Premium
The rise of the worker productivity scorePremium
Delhi Confidential: Tiranga selfies campaign a big hit on Independence DayPremium
Bihar berozgari refrain makes way into CM’s job promisePremium

The Gorakhpur, Sindri and Barauni projects are being set up by Hindustan Urvarak & Rasayan, another public sector joint venture of Coal India Ltd (CIL), NTPC, Indian Oil Corporation (IOC) and FCIL. “They should be fully operational before rabi 2021. Ramagundam was supposed to start from this kharif (June) and the other three by 2021 kharif. But the construction disruptions from Covid-19 have pushed these back by about six months,” the official said.

Urea production vs. imports (lakh tonnes) 





Total China
2013-14 227.15 75.79 31.45
2014-15 225.85 86.77 64.31
2015-16 244.75 94.39 49.50
2016-17 242.01 57.96 9.98
2017-18 240.23 64.56 8.46
2018-19 240.00 66.34 14.20
2019-20 244.55 109.75 29.26

(Source: Departments of Fertilisers and Commerce)

Talcher, unlike the other four running on imported natural gas, is envisaged to be a coal gasification-based ammonia-urea complex. It will use coal from the North Arkhapal mine of Talcher coalfields. Since this coal has high ash content, it would be blended with petroleum coke sourced from IOC’s Paradip refinery.


“While the feedstock is substantially indigenous (pet-coke is a byproduct of domestic refineries that mainly process imported crude), the technology is Chinese. The lump-sum turnkey contract was awarded to Wuhuan Engineering Co. Ltd last September. It is a commercial deal between the Wuhan-based technology provider-cum-EPC (engineering, procurement, construction) contractor and Talcher Fertilisers Ltd (a consortium of CIL, GAIL India, Rashtriya Chemicals & Fertilisers and FCIL),” the official explained.

The Talcher project is projected to cost around Rs 13,300 crore, as against the Rs 5,500 crore of Ramagundam and Rs 7,000 crore each for the other three.

Besides, there are two plants of Nagarjuna Fertilisers & Chemicals at Kakinada in Andhra Pradesh with 1.52 mt aggregate capacity and a 1.27 mt facility of Matix Fertilisers & Chemicals at Panagarh near Durgapur in West Bengal. All three are now idling with the companies defaulting on loans. The Matix unit was planned to run on coal-bed methane and even began operating from October 2017 before production had to be suspended due to non-availability of feedstock. Its revival hinges upon natural gas from the 2,655-km Jagdishpur-Haldia and Bokaro-Dhamra pipelines that are also supplying to Gorakhpur, Sindri and Barauni. The section connecting Matix is said to be close to completion.


“If they are operational through new promoters, we can increase our production capacity by 9 mt-plus, from the existing 24-24.5 mt. There would hardly be any need for imports then,” the officials added.

Critics of the atmanirbharta mission in urea note that make-in-India is more expensive than imports. The current landed cost of imported urea is below $ 240 per tonne. On the other hand, the feedstock cost alone for urea produced from the new plants, even though more energy-efficient, will be roughly $ 157 per tonne at present gas prices. Adding the $ 155-175 fixed cost that these plants are entitled to for an eight-year period – to cover all other charges, including interest, depreciation and profit – the difference between imported and domestically-produced urea would come to $ 70-90 per tonne.

The counter to this argument, however, is that the import cost is for bulk urea arriving in vessels at ports, as opposed to fully-bagged domestically-manufactured material. Factoring in import duty, stevedoring and bagging charges – plus the fact that the new plants are in the northern and eastern hinterland home to the next Green Revolution – will further bring down the price differential. On top of that is the “psychological gains” from cutting down imports, particularly from China.

Apart from urea, India also imports significant quantities of di-ammonium phosphate (DAP), the country’s second most-consumed fertiliser, from China. These amounted to 3.26 mt (out of a total of 6.85 mt) in 2018-19 and 2.16 mt (out of 5.55 mt) in 2019-20, with their corresponding values at $ 1.41 billion ($ 2.96 billion) and $ 800.38 million ($ 2 billion).

“DAP imports are free, unlike for urea that is allowed only through state trading enterprises. But we can encourage more imports from other origins such as Saudi Arabia, Morocco, Jordan and US,” the official added.

📣 Join our Telegram channel (The Indian Express) for the latest news and updates

For all the latest India News, download Indian Express App.

  • Newsguard
  • The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.
  • Newsguard
First published on: 13-07-2020 at 02:07:22 am
0 Comment(s) *
* The moderation of comments is automated and not cleared manually by

Featured Stories