India is primarily an agriculture based economy.

The agricultural sector and its

other associated spheres provide employment to a large section of the country's
population and contribute about 25% to the GDP.

The Indian Fertilizer Industry is one of the allied sectors of the agricultural
sphere. India has emerged as the third largest producer of nitrogenous fertilizers. The
adoption of back to back Five Year plans has paved the way for self sufficiency in the
production of food grains. In fact production has gone up to an extent that there is scope
for the export of food grains. This surplus has been facilitated by the use of chemical
fertilizers.

The large scale use of chemical fertilizers has been instrumental in bringing about
the green revolution in India. The fertilizer industry in India began its journey way back
in 1906. During this period the first Single Super Phosphate (SSP) factory was
established in Ranipet in Chennai. It had a capacity of producing 6000 MT annually. In
the pre and post independence era a couple of large scale fertilizer units were established
namely the Fertilizer Corporation of India in Sindri, Bihar and the Fertilizer & Chemicals
Travancore of India Ltd in Cochin, Kerala.

The Indian government has devised policies conducive to the manufacture and
consumption of fertilizers. Numerous committees have been formed by the Indian
government to formulate and determine fertilizer policies. The dramatic development of
the fertilizer industry and the rise in its production capacity has largely been attributed to
the favorable policies. This has resulted in large scale investments in all three sectors viz.
public, private and co-operative.

At present there are 57 large scale fertilizer units. These manufacture an extensive
range of phosphatic, nitrogenous and complex fertilizers. 29 of these 57 units are engaged
in the manufacturing of urea, while 13 of them produce Calcium Ammonium Nitrate and
Ammonium Sulphate. The remaining 20 fertilizer plants manufacture complex fertilizers
and DAP. There are also a number of medium and small scale industries in operation,
about 72 of them. The following table elucidates the installed capacity of each sector.

Sl. No Sector Capacity (LMT) Percentage Share

N P N P
1 Private Sector 53.94 35.13 44.73 62.08
2 Public Sector 34.98 4.33 29.0 7.65
3 Cooperative Sector 31.69 17.13 26.27 30.27
Total 120.61 56.59 100.0 100.0
 The Department of Fertilizers is responsible for the planning, promotion and
development of the Fertilizer industry. It also takes into account the import and
distribution of fertilizers and also the financial aspect. There are four main divisions of
the department. These include Fertilizer Imports, Movement and Distribution, Finance
and Accounts, Fertilizers Projects and Planning and Administration and Vigilance. It
makes an assessment of the individual requirements of the states and union territories and
then lays out an elaborate supply plan.

Though the soil in India is rich in silt, it lacks chief plant nutrients like potassium,
nitrogen and phosphate. The increase in the production of fertilizers and its consumption
acts as a major contributor to overall agricultural development.

Fertilizer Industry, India Fertilizer

Industry
Though much euphoric services sector growth in Indian economy has drawn the
attention over the globe, still its importance brings confusion when we come across the
parameters like increasing inequality and a stalemate in condition.

Agriculture the backbone of Indian Economy still holds its relative importance for
more than a billion peoples. The Government Of India from time to time has taken
considerable steps for the upliftment of Agriculture Sector. Here we have analyzed the
performance of Fertilizer Industry being one of the vital parts in agricultural production
and Government's policy initiatives for the same.

Fertilizer in the agricultural process is an important area of concern. Fertilizer

industry in India has succeeded in meeting the demand of all chemical fertilizers in the
recent years.The Fertilizer Industry in India started its first manufacturing unit of Single
Super Phosphate (SSP) in Ranipet near Chennai with a capacity of 6000 MT a year.

India's green revolution in late sixties gave a positive boost to the sector. The
sector experienced a faster growth rate and presently India is the third largest fertilizer
producer in the world.
According to Given Statistics, total capacity of the industry as on 30.01.2003 has reached
a level of 121.10 lakh MT of nitrogen (inclusive of an installed capacity of 208.42 lakh
MT of urea after reassessment of capacity) and 53.60 lakh MT of phosphatic nutrient.

Presently there are 57 large fertilizers plants in the country producing urea, DAP,
Complex fertilizer,Ammonium Sulphate (AS) and Calcium Ammonium Nitrate (CAN).

Fertilizer Companies
Public Sector Fertilizer Companies:

NATIONAL FERTILIZERS LIMITED (NFL)

PARADEEP PHOSPHATES LIMITED (PPL)

FERTILISERS & CHEMICALS TRAVANCORE LTD. (FACT)

PYRITES, PHOSPHATES & CHEMICALS LTD. (PPCL)

HINDUSTAN FERTILIZER CORPORATION LIMITED (HFC)

Concluding remarks on Indian Fertilizer

Industry
The Indian fertilizer industry has helped in the growth of the Indian economy. The
fertilizer sector by enhancing the agricultural productivity has in turn resulted in
providing a major support to the farmers who are primarily dependent on agriculture.
Fertilizers have also played a pivotal role in India's food Security.

For the Indian government, food has been the primary objective owing to its huge
population. In India, therefore the fertilizer industry has wielded immense influence, like
no other sectors in India. To cater to the needs of the individual, government top priority
has been towards production of food grain. Since the poor farmers could not afford to buy
expensive fertilizing agents, the government's interventionist policy helped in providing
the farmers fertilizers at a reasonable cost. The government formulated the Retention
Price-Cum Subsidy scheme which has been a major impetus for the fertilizing industry
since 1977 to 1992.

The following data compares the consumption against the production of fertilizers
in India over the years.

Increase in fertilizer consumption:

• 1950-51: .07mn Mts

• 1975-76: 2.9mn Mts
• 2005-06: 20.3mn Mts

Increase in fertilizer production:

• 1951-52: .04 million Mts

 • 1975-76: 1.8mn Mts
• 2005-06: 15.5mn Mts

These periods also witnessed a rapid increase in food grain production, which was
estimated to be initially 121 million tons from 52 million tons and finally increased to
208 tons.

At present the government has formulated a new pricing scheme (NPS) replacing the
RPS. The fertilizer industry of India is not same in terms of stock, its yield, and
technology. Because of this, the urea plants have been assorted into groups to reduce
them from being diverse and incomparable under the NPS scheme. The NPS has been
modified, promoting further investment in the Indian fertilizer sectors.

The Fertilizer Association of India (FAI) has been set up a model which is based on
several factors that include fertilizer prices, high yielding areas, irrigated areas, fertilizer
nutrient prices and previous years' fertilizer consumption. An estimate of the demand and
supply till the end of the 11 th five year plan is given in the chart below:

Year Supply Demand Demand Supply Demand of K

Gap N+P+K
N+P N+P+K
2007-08 16950 23125 8835 2660
2008-09 17585 24085 9305 2805
2009-10 18595 25035 9405 2965
2010-11 19912 25960 9178 3130
2011-12 19965 26900 10235 3300

Today, India stands as the third largest fertilizer consumer and producer of the
world. It has been observed that the subsidies on Indian fertilizer have been rising at
constant rate. This is due to the rise in the cost of production and the inability of the
government to raise the maximum retail price of the fertilizers. The population of the
country is rapidly increasing at 1.5% annually. This requires higher production of food
grains. The total cropped area is only 30% of the net geographical area, which is not
enough for increasing the agricultural productivity. Now, the main focus is on the
improvement of the farm income, for which the fertilizer industry needs to lay more
stress on the agricultural activities in the country. This will also help to improve terms
between the government agencies and the fertilizer industry in India.
Challenges before Indian Fertilizer
Industry
The growth trajectory of the Indian fertilizer industry has camouflaged the
impending challenges with which it is faced. Growth and development of agriculture in
India derives a significant stimulus from the fertilizer industry.

Agricultural milieu in India could be jeopardized by the uncertainties in the fertilizer

industry. The government is faced with the piquant situation, which demands a balance
between the needs of the farmers and the fertilizer manufacturers.

The challenges before the Indian fertilizer industry relate to the incertitude in the supply
of fertilizers. There has been a surge in the demand for fertilizers in the past few years.
Good monsoonal showers have led to the growth in agriculture, inadvertently increasing
the consumption rate of fertilizers. However, the robust growth in consumption
propensity has not been met with the required surge in fertilizer production. This has
widened the gap between the demand and supply of fertilizers, which has led to an
increase in the dependence of the country on imports. This also reflects on the lack of
realizing of the domestic capacity utilization of the reserves in the country.

Another important factor that has led to the stunted growth of the fertilizer industry is the
rise in prices of the feedstock. The fertilizer industry is dependent on gas for the
production of urea and phosphoric acid for the production of phosphatic fertilizers and
DAP. The country imports its inputs from other countries. The overseas suppliers of raw
materials realize the predicament of the Indian fertilizer industry and have started
exploiting the shortage through clever pricing.

In recent years, some of the private companies, dedicated to the production of fertilizers
have affectively taken stakes in the overseas sources of raw materials. Although this has
aided the industry, it has however been unable to reduce the government's burden of
subsidizing the rates. The fertilizer industry is remained protected under the umbrella of
the Retention pricing scheme of the Indian government.

The government has introduced policies to decontrol the prices but delayed the
implementation of the parameters that have not augured in favor of the industry. As a
result, fertilizer subsidies continue to mount and are expected to cross Rs. 50,000 crore in
the year 2008. The pricing of the fertilizers are also dependent on the freight charges that
are Baltic dry index.

The small size of the older plants and the low efficiency of the public sectors also pose as
drawbacks of the industry. Recent policies of the government are directed towards
revamping of these industries and restoring them to health.
The fertilizer industry is faced with other challenges inter alia infrastructural bottlenecks
and the uncertainties in government policies. The delay in decision making and obscurity
in setting parameters are among some of the major drawbacks of the government policies
directed towards the industry.

To retrieve the health and growth of the fertilizer industry, the government of India is in
need of long term realistic policies that would enable the industry to overcome the
challenges and survive the present impasse.

Public Sector Companies in Indian

Fertilizer Market
There are a number of public sector companies in Indian fertilizer market producing
complex fertilizers, ammonium sulphate, DAP, calcium ammonium nitrate and urea. At
present, there are nine public sector undertakings in the Indian fertilizer market and one
cooperative society.

These function under the supervision of the Department of Fertilizers of India. Of the 63
large units producing fertilizers in India, 9 units are dedicated to the production of
ammonium sulphate and 38 units produce urea. There are 79 small and medium scale
units dedicated to the production of single super phosphate. The Indian industries
producing fertilizers have to total capacity of 56 lakh MT of phosphatic nutrient and 121
lakh MT of nitrogen.

Some of the public sector undertakings in this sector are mentioned below:

Fertilizer Corporation of India Limited (FCIL) - This Company was established on

1st January, 1961. It was later reorganized with the National Fertilizers Limited from
1978. FCI comprises of four units in Gorakhpur (Uttar Pradesh), Sindri (Jharkhand),
Ramagundam (Andhra Pradesh) and Talcher (Orissa). The company incurred a loss of
Rs. 1209.10 Crore during the financial year of 2004-2005.

Hindustan Fertilizer Corporation Limited (HFC) - Established on 14th March, 1978,

Hindustan Fertilizer Corporation Limited was incorporated consequent to the
reorganization of the NFL Group of Companies and the Fertilizer Corporation of India
Limited. The company has established four units at Durgapur (West Bengal), Namrup
(Assam), Haldia (West Bengal) and Barauni (Bihar). It has incurred a net loss of 964.61
in the financial year 2005-2006.

Pyrites, Phosphates & Chemicals Limited - This Company was incorporated in the
year 1960 to explore the pyrites deposits in India. Pyrites, Phosphates & Chemicals
Limited has three units at Amjhore (Bihar), Dehradun (Uttaranchal) and Saladipura
(Rajasthan). Pyrites, Phosphates & Chemicals Limited incurred a net loss of Rs. 113.91
in the year 2005-2006.

Rashtriya Chemicals and Fertilizers Limited (RCF) - This company was incorporated
in the year 1978 consequently after the reorganization of the Fertilizer Corporation of
India. The company has its units in Trombay and Thal. The net worth of the company in
the year 2000-2001 was 1366 Crore.

National Fertilizers Limited (NFL) - This company was incorporated on 23rd August,
1974. It had two nitrogenous plants during its inception at Bathinda and Panipat. In the
year 2005-06, NFL showed a post-tax profit of Rs. 116.40 Crore. It had produced 11447
tons of industrial nitrogen and 33.44 LMT of urea in the same year.

Projects &Development India Limited (PDIL) - PDIL was registered in the yea 1978
after the reorganization of the Fertilizer Corporation of India. The company earned a
profit of Rs. 10.64 Crore in 2005-06. The company has played a pivotal role in the
designing, procurement, inspection, engineering and supervision of the fertilizer
companies and pants.

The Fertilizers and Chemicals Travancore Limited (FACT) - Incorporated in the year
1943, FACT is dedicated to the production of Ammonium Sulphate. The company has
two established plants at Cochin. The company has earned a net profit of Rs. 235.66
Crore at the end of the financial year of 2006. This recovered the loss incurred in the
previous year.

Madras Fertilizers Limited (MFL) - MFL was registered in the year 1966. The
company has its plant in Chennai and is dedicated to the production of ammonia,
complex and bio-fertilizers and urea. MFL utilized 76% of its capacity to produce 368.5
thousand tons of Urea in 2005-06. The company produced 208.2 thousand tons of
complex fertilizers using 25% of its capacity.

FCI Aravali Gypsum & Minerals India Limited, Jodhpur - This Company was
registered as a government undertaking consequent to the reorganization of the Jodhpur
Mining Organization. FCI Aravali Gypsum & Minerals India Limited, Jodhpur produced
8.54 LMT of gypsum in the financial year of 2005-06.

Some of the other companies engaged in the production of fertilizers are listed
below:
 Paradeep Phosphates Limited (PPL)
 Neyveli Lignite Corporation Ltd. (NLC)
 Hindustan Copper Limited (HCL)
 Steel Authority of India Limited (SAIL)
Government Policies and Indian
Fertilizer Industry
Government policies and Indian fertilizer industry share a direct nexus, with pricing
mechanisms, productive growth and subsidies forming the crux of the economic
objectives of the government. The government policies for the fertilizer industry are
devised to ensure a sustainable growth and development path in one of the most intensive
sectors of the Indian economy.

Growth, production and usage of the fertilizer industry are directly dependent on the
government policies. Production of foodgrain in India derives the main stimulus for its
growth from the fertilizer industry. The government has intervened time and again in
determining the prices, movement and distribution of the fertilizers and its successful
policies have pitted India as the third largest consumer and producer of the agro-input in
the world after China and the United States.

The policies pursued by the government are devised in response to the recommendations
of the high-powered committees of the country. The Sivaraman Committee Report (1966)
highlighted the importance of the balanced use of fertilizers along with providing
adequate credit support for its distribution and usage. The committee also provided inputs
for realizing the importance of liberalization of fertilizer marketing that would promote
the production of the domestic companies.

The Retention Price Scheme introduced by the government followed the recommendation
of the Marathe Committee that explored the possibilities of maintaining the farm gate
prices of fertilizers. This would enable the government to maintain prices of the fertilizers
during the time of crisis.

The first decontrol policies of the government were introduced in 1992 on the
recommendations of the Joint Parliamentary Committee. Phosphatic and potassic
fertilizer industries were decontrolled by the government while urea industry continued to
produce under subsidized rates.

The complex fertilizer industries were subdivided onto two categories in 2001 after the
modification of the 1998 Tariff Commission. Group I comprised of imported ammonia or
industrial units using gas while Group II included industries using naphtha or fuel oil.
Concessions to the naphtha based units were more than the other group as this showed
lesser efficiency.

Other committees provided recommendations on the methods of promotion, marketing,

distribution and pricing of the fertilizers in India.

Change in government policies is however often responsible for hampering new

investments in the industry. Although the investment in this sector was Rs 20, 677 crore
in September, 2007, most of the bottlenecked projects have not been cleared by the
Department of Fertilizers. The industry will soar up new heights and create a new growth
story with the clearance of the projects and the approval of the new policies.

The production of phosphatic fertilizers in India is heavily dependent on imports as the

country is not endowed with phosphate raw materials. The present objective of the
government policies is to develop a long term program that would protect the interests of
the domestic manufacturers and reduce the dependence of this industry on foreign
imports. Reaching stagnancy, the health of this industry can be restored with a more
realistic policy pursued by the government.

Private Companies in Indian Fertilizer

Market
A number of private companies in the Indian fertilizer market are engaged in production
of the agro-input. Most of the companies also engage in exporting fertilizers in the global
market, earning foreign capital from the business. The country stands at the third position
among the largest producers of the product in the world. India is also ranks among the
highest consumers of fertilizers.

The euphoric growth in the business has also facilitated the agricultural industry of India,
which is dependent for its optimization on the fertilizer industry.

Phosphatic and nitrogenous fertilizers such as urea, single super phosphate and
ammonium are produced by the companies in India. Complex fertilizers such as di-
ammonium phosphate are also domestically produced. However, lack of indigenous
reserves of potash does not support the production of potassic fertilizers in the country.
The nitrogenous fertilizer production capacity is higher in the public sector units while
the private companies in the Indian fertilizer market have a larger capacity for the
production of phosphatic fertilizers.

Private Companies Producing Fertilizer in India

Some of the private companies producing fertilizers in India are mentioned

below:Khaitan Chemicals and Fertilizers Limited - This Company produces single
super phosphate fertilizer and sulphuric acid. The fertilizer is manufactured in the
granular form in this company. Khaitan Chemicals and Fertilizers Limited has its office
in Indore.

Mangalore Chemicals - This is the only company in the state of Karnataka that is
engaged in the manufacturing of chemicals and fertilizers. The plant has an annual
turnover of more than Rs. 800 crore.

Nagarjuna Fertilizers - With their office at Hyderabad, this company is engaged in the
production of fertilizers and agro-chemicals. It also engages other activities such as
refining petroleum, finance and power.

Zauri Chambal - An undertaking of the K.K Birla Group, this company engages in the
production of fertilizers such as urea, hybrid seeds, cement and chemicals. The company
also provides engineering solutions and home finance. The company was established in
collaboration with the US Steel Corporation. The company has established NPK plant,
DAP plant, urea plant and ammonia plant in the country.

BEC Fertilizers - This Company is dedicated to the manufacture pf agro-inputs that will
facilitate the agricultural sector. The company manufactures the product ANAND single
super phosphate along with other micro-nutrients, plant hormones and chemicals for the
protection of plants. The company has established its unit in Bilaspur, Uttar Pradesh.

Gujarat State Fertilizers &Chemicals Limited - This multiproduct company is

dedicated to the production of fertilizers such as ammonium sulphate, urea, DAP and
NPK. It also produces water soluble fertilizers. Along with fertilizers, the company is
engaged in the production of bio-fuels, bio-fertilizers, plant tissue culture and oleum.

DSCL - The primary business of this company based in North India is the manufacture of
urea and other farm inputs such as DAP, chemicals and pesticides.

Some of the other private companies engaged in the production of fertilizers in

India are listed below:
 The Scientific Fertilizer Co Pvt Ltd
 Coromandel Fertilizers
 Deepak Fertilizers and Petrochemicals Corporation Limited
 Apratim International
 Aries AgroVet
Devidayal Agro Chemicals.

The production of nitrogenous fertilizer in the private sector has been increasing in the
past few years. The private sector had only 13% share in the production in 1960-61. The
private sector has always retained a higher share in the production of phosphatic fertilizer
production.
Major Players in Indian Fertilizer Market
The development trajectory of the agricultural industry derives its main stimulus from the
growth in production of fertilizers in India. The fertilizer industry earlier witnessed the
preponderance of the public sector units who still retain their status as the major players
in Indian fertilizer market. Coupled with the private enterprisers manufacturing
fertilizers, India has emerged as the third largest producer of the agro-input. The country
has also emerged as one of the largest consumers of fertilizers along with China and the
United States of America.

The fertilizer sector in India holds a major share among the energy intensive industries of
the country. The industry has shown unparalleled growth in the past few years. Although
growing in an accelerating rate, the industry is faced with a number of challenges, inter
alia, the lack of major plant resources such as nitrogen, phosphate and potassium.
Notwithstanding these specificities, India produces both nitrogenous and phosphatic
fertilizers in the domestic market. Urea and ammonium are the two popularly
manufactured nitrogenous fertilizers in India. The various companies dedicated to the
manufacture of fertilizers also produce straight phosphatic fertilizers such as single super
phosphate and complex fertilizers such as di-ammonium phosphate or DAP. The lack of
indigenous reserves of potash in India has stunted the production of potassic fertilizers in
the country.

The Indian fertilizer industry has a capacity of 56 lakh MT of phosphatic nutrient and 121
lakh MT of nitrogen. While the private sector has a huge installed capacity for phosphatic
fertilizers, capacity utilization of nitrogenous fertilizers is higher in the public sector.

Sector-wise, Nutrient-wise Installed Fertilizer Manufacturing Capacity as on

31.01.2007
The government has established nine public sector undertakings in the Indian fertilizer
market and one cooperative society, known as the Krishak Bharati Cooperative Limited
(KRIBHCO) that functions under the supervision of the Department of Fertilizers in
India. There are 63 large units dedicated to the production of fertilizers. Among these, 9
units produce ammonium sulphate while 38 units produce urea. There are 79 small and
medium scale units producing single superphosphate.

The public sector companies in Indian fertilizer market are listed below:
 Fertilizer Corporation of India Limited (FCIL)
 Hindustan Fertilizer Corporation Limited (HFC)
 Pyrites, Phosphates & Chemicals Limited
 Rashtriya Chemicals and Fertilizers Limited (RCF)
 National Fertilizers Limited (NFL)
 Projects &Development India Limited (PDIL)
 The Fertilizers and Chemicals Travancore Limited (FACT)
 Madras Fertilizers Limited (MFL)
 FCI Aravali Gypsum & Minerals India Limited, Jodhpur

Along with the public sector units, there has been a euphoric growth in the production of
fertilizers in the private sector as well. Some of the companies dedicated to the
production of fertilizers include Khaitan Chemicals and Fertilizers Limited, Managalore
Chemicals, Nagarjuna Fertilizers, Zauri Chambal, BEC Fertilizers and Gujarat State
Fertilizers &Chemicals Limited.

The fertilizer industry in India shows an upward rising trend that would challenge the
broader market in future years. With an outstanding investment of Rs. 20, 677 Crore in
the September, 2007 quarter, the sector will witness burgeoning production that will
reach new heights in the coming years. Most of the companies are expecting an approval
for their huge capital expenditure plans from the Department of Fertilizers in India. The
flourishing industry will fill in the gap between demand and supply of fertilizers in India.

Size of Indian Fertilizer Industry

The production of food grains in India rose by an excess of 156 million MT since 1951-
52. The fertilizer industry has played a major role in this mass production of food grains.
The fertilizer industry came into being in India in the year of 1906. The first
manufacturing unit of Single Super Phosphate (SSP) had a manufacturing capacity of
6000MT.

As per Government of India records on 31.01.2007, the Indian fertilizer industry has
made a production of 120.61 LMT of nitrogen (N) and 56.59 LMT of phosphatic (P)
nutrient. The installed capacity of urea in India is estimated to be 207.52 LMT. These
successes in the production by the fertilizer companies of India have crowned India the
3rd largest fertilizer producer in the world.

In 2005-06 the production of fertilizers in India was equally impressive. In nutrient terms
(N, P and K), the annual consumption of fertilizers in 2005-2006 was 203.40 LMT. This
was an increase by more than 200 LMT since 1951-52. Per hectare consumption of
fertilizers has also witnessed a considerable growth. In 2005-06 per hectare consumption
has scaled to 104.5 Kg while the figure was less than1 Kg in 1951-52.

The Indian fertilizer industry started operating in a big scale since 1940s, when the
Fertilizer & Chemicals Travancore of India Ltd. and the Fertilizers Corporation of India
were set up in Kerala and Bihar respectively. The fertilizer industry in India grew to a
considerable extent in 1970s and 1980s after the emergence of the green revolution in the
late sixties.

India has reached self-reliance in food-grain production. The country also generates
surpluses to an extent that she can export. This massive production owes largely to the
public sector as well as the cooperative sector of the fertilizer industry. Under the
administrative control of the Department of Fertilizers, there are 9 public sector
undertakings. The cooperative societies count two in number. The private sector has also
contributed to the Indian fertilizer industry. Some of the notable private companies to
contribute to the production are Chambal Fertilizers and Chemicals Limited and Tata
Chemicals Limited. The private sector produced 44.73 % of nitrogenous fertilizers and
62.08 % of phosphatic fertilizers in 2006-07.

The Indian large size fertilizer units manufacture wide varieties of nitrogenous and
phosphatic/ complex fertilizers. As in 2005-06, these large-scale fertilizer units count 56.
In addition to the nitrogenous and phosphatic/ complex fertilizers, the large-scale units
produce urea and ammonium sulphate as a by-product. The single super phosphate is
produced in India by 9 units. Besides, there are 72 small and medium scale fertilizer
units. These units operate mainly to produce SSP.

The production of urea in India has reached near self-sufficiency. The requirement of the
nitrogenous fertilizers is met through the indigenous industry. In the case of phosphatic
fertilizers, the raw materials and intermediates are imported in large scale. With the aid of
the imported raw materials, phosphatic fertilizers are produced to meet the requirements
for the domestic market. The requirement of potash (K) is met entirely through imports.
No fertilizer unit of India has any reserve of potash.

The growth of the fertilizer industry was at its peak in the 1970s and 1980s. The growth
was a bit stagnant in the last decade of the 20th century. But, with many radical steps
been taken by the Government of India, the industry is expected to grow again
Growth of Indian Fertilizer Industry
The Indian fertilizer industry has come a long way since the setting up of the
manufacturing unit of Single Super phosphate (SSP) near Chennai in 1906 A new
impetus to the growth of Indian Fertilizer industry was provided by the set up the two
fertilizer plants- Fertilizer & Chemicals Travancore of India Ltd. (FACT) in Kerala and
the Fertilizers Corporation of India (FCI) in Bihar. This was during the forties and the
fifties.

The aim was to create an industrial base that would provide India with self reliability in
food grains.

India witnessed significant growth of the fertilizer industry during the sixties and the
seventies. By 2003, India had an installed capacity of 12.11 million MT of nitrogen and
5.36 million MT of phosphate. Today, with 57 large sized fertilizer plants manufacturing
a wide variety of the nitrogenous, complex and phosphatic fertilizers, the Indian fertilizer
industry is the 3rd largest producer in the world. One of the major factors that have led to
the rapid increase in the production capacity of fertilizers in India is the policy
environment. With the formulation and implementation of investor friendly policies,
large investments poured into the private, public and co-operative sectors and this
propelled the growth of the Indian fertilizer industry.

Some of the major fertilizer companies in India (in the public sector) are as
follows:

National Fertilizers Limited (NFL)

Hindustan Fertilizer Corporation Limited (HFC)
Paradeep Phosphates Limited (PPL)
Fertilizers & Chemicals Travancore LTD. (FACT)
Rashtriya Chemicals & Fertilizers Limited (RCF)
The Fertilizer Corporation of India Limited (FCI)
Steel Authority of India Limited (SAIL)
Madras Fertilizers Limited (MFL)

Reports showed the total installed capacity of fertilizer production in 2004 to be 119.60
LMT of nitrogen and 53.60 LMT of phosphate. These figures went up to 120.61 LMT of
nitrogen and 56.59 LMT of phosphate in 2007. The production of fertilizers was 113.54
LMT of nitrogen and 42.21 LMT of phosphate during 2005-06. The target of production
for 2006-07 was set at 114.48 LMT of nitrogen and 48.20 LMT of phosphate. Though the
target production was not met, there was a growth in production during 2006-07 as
compared to the production during 2005-06.

Indian fertilizer industry has reached international levels of capacity utilization by

adopting various strategies for increasing the productions of fertilizers. These include the
following:
 Expansion and increase in efficiency through modernization and revamping of
existing fertilizer units.
 Reviving some of the closed fertilizer plants.
 Using alternative sources, such as coal or liquefied natural gas for the production of
fertilizers, especially urea.
 Establishing joint venture projects with companies in countries that abound in
cheaper resources of raw materials.

In order to meet the demand for gas, which is one of the prime requirements for the
production of nitrogenous fertilizers, India has entered into joint ventures with foreign
companies in a number of countries. Joint ventures have also been established for the
supply of phosphoric acid. Indian fertilizer manufacturing companies has joined hands
with companies in Senegal, Oman, Jordan, Morocco, Egypt, Tunisia and other countries.

It is, therefore, evident that the Indian fertilizer industry has witnessed extensive growth
and development in a short span of time. With such extensive growth, it is not surprising
that the India ranks among the leading fertilizer manufacturing countries of the world