Press Release Summary: Bharatbook.com launches a latest report which gives a detail information about "Indian Fertilizer Industry"
Press Release Body: Bharatbook.com added a new report on "Indian Fertilizer Industry" (http://www.bharatbook.com/detail.asp?id=76709)
The Indian fertilizer industry has come a long way since its early days post independence. India today is one of the largest producer and consumer of Fertilisers in the world. India’s production in terms of nutrients (N & P) reached a level of 155 lakh MT in 2005-06 from 0.39 lakh MT in 1951-52.Similarly, consumption of fertilizers in terms of nutrients (NPK) has also grown from about 0.66 lakh MT in 1951-52 to nearly 184 lakh MT in 2004-05. The Indian Fertilizer industry, given its strategic importance in ensuring self– sufficiency of food grain production in the country, has for decades,been under Government control. The government has over the years, provided subsidies/concessions through the fertilizer companies to farmers and the manufacturers have been compensated through various schemes. Though the Government control helped in meeting the objective of ensuring creation of capacities and ultimately achieving self-sufficiency in food grain production, it did not encourage improving efficiencies in the sector. With the burgeoning subsidy bill and the need to focus on fiscal prudence, Government polices in recent times are aimed at encouraging efficiencies in the sector. Policy measures like the new pricing scheme have made the operations of less efficient players unviable. The Government polices today are oriented towards achieving the stated objective of total deregulation in the sector. However, the uncertainty over exact policy parameters and absence of a comprehensive long term policy has not augured well for the industry. For instance, the financial year 2006-07 began with practically no clarity on the policy parameters for both nitrogenous and phosphatic fertilizers. The policy parameters for third stage of the new pricing scheme for urea which was to be implemented from the beginning of the current financial year (FY07) are yet to be announced and the implementation of the Prof. Abhijith Sen Committee report on phosphatic fertilizers is also pending. The uncertain policy environment has also not encouraged any major investments in domestic capacity. Another important issue confronting the sector is with respect to the feedstock. Natural gas which is the main feedstock for production of nitrogenous fertilizers is available in limited quantities and the industry competes with the power sector for its share. With the Government policy favouring conversion to gas based units, the demand for gas is only expected to go up in the future, which may in turn lead to further shortages. Similarly, in the case of phosphates, on account of the limited availability of phosphoric acid and rock phosphate in the country, domestic units are dependent to a large extent on imports. In view of the limited availability of the main feedstock within the country, fertiliser companies today are exploring the possibility of setting up joint ventures abroad to tie up their feedstock requirements. Though a few joint venture agreements have been signed with respect to supply of phosphoric acid, only a couple of joint ventures have been established with respect to urea. Domestic players have also not been able to enter into long term gas supply agreements primarily due to differences over pricing.
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2025
