Government emphasizes on use of nano fertilisers: A look at domestic production of fertilisers in India

By: Yash Gupte

In a meeting held on March 1, 2023, States were instructed to promote the use of new fertilisers such as bio-fertilizers, triple super phosphate (TSP), potash derived from molasses (PDM), sulphur coated urea, and nano fertiliser.

In a major step towards achieving self-reliance or ‘Aatmanirbharta’ in the production of fertilisers, the Government of India has now approved the Nano DAP after Nano Urea. Nano fertilisers have recently entered the market, and Indian Council of Agricultural Research (ICAR) conducted trials have yielded excellent results. In a meeting held on March 1, 2023, States were instructed to promote the use of new fertilisers such as bio-fertilizers, triple super phosphate (TSP), potash derived from molasses (PDM), sulphur coated urea, and nano fertiliser. The meeting was co-chaired by the secretaries of the Department of Agriculture & Farmers Welfare and the Department of Fertiliser.

The Department of Fertilizers (DoF) has adopted the Direct Benefit Transfer (DBT) scheme for fertiliser subsidy payment in order to improve the delivery of fertiliser services to farmers. According to the DBT fertiliser scheme, fertiliser businesses receive a 100 percent subsidy on various fertiliser grades based on the actual sales that the retailers make to the beneficiaries. In order to ensure that there is an appropriate supply of fertilisers in the nation, the central government is also implementing a number of initiatives. An online monitoring system called the Integrated Fertilizer Monitoring System tracks the movement of all significant subsidised fertilisers across the entire nation. Apart from this, the State Governments are regularly advised to coordinate with manufacturers and importers of fertilizers for streamlining the supplies through timely placement of indents for railway rakes.

Fertilisers are the additional products used in agriculture to enhance the productivity of crops. They are generally used for increasing the crop yield. Though the overuse of fertilisers is harmful for crops, they have a rapid effect on crops helping the farmers in increasing the produce. Fertilisers make plants more resistant to pests. Fertilisers improve the water holding capacity of the plants and increase root depth. Also, the phosphorous in the fertilisers plays a very important role. It helps in faster development of roots and formation of seeds in plants. 

The chart below takes a look at the domestic production of fertilisers in India.

In the last five years, from 2016 to 2021, the Indian fertiliser market grew by 22.6 percent. The country's production of fertilisers, however, only increased by a meagre 3.78 percent, increasing its reliance on imports, which increased by 48.22 percent in FY 2020–21 from FY 2016–17. The most widely used fertiliser in India is urea, which accounts for 57 percent of all key fertilisers (Urea, Di-ammonium Phosphate (DAP), Muriate of Potash (MOP), and Nitrogen, Phosphorous, and Potassium) (NPK).

The central government has been focusing on minimizing the import of fertilisers and increasing the domestic production of fertilisers. Five large-scale capacity fertiliser production plants (Ramagundam, 3 HURL Plants Gorakhpur, Barauni & Sindri and Matix) are planned by the government which will guarantee to decrease imports by 6.35 million tons. DAP is the major consumed fertilizer in India after Urea and NPK. According to reports, the sales of DAP fertilizers is increasing in India year over year and touched a level of 10.5 million tons in FY 2020-21, with the growth of around 19.3 percent in last 5 years. The production of DAP hit 3.8 million tons, with a 13.6 percent decline in growth over the previous five years, and imports touched 5.8 million tons, with an increase of 31.8 percent over those same five years. Raw material price, forex fluctuations, agro-climatic risks and retail price differential of P&K fertilizers are some of the factors responsible for low production of DAP in the country. 

The Narendra Modi administration plans to launch a new programme called PM PRANAM, which stands for PM Promotion of Alternative Nutrients for Agricultural Management Yojana, in an effort to encourage states to use less chemical fertiliser. The government will reward the states that use fewer chemical fertilisers in a given year through this programme. One of the primary objectives of the scheme will be minimising Union government's subsidy burden on chemical fertilisers. The subsidy burden on the center is estimated to increase by 39 percent from Rs 1.62 lakh crore last year to Rs. 2.25 lakh crore in 2022-2023.

With PM-PRANAM, the centre will grant the state that saves the money half of the subsidy savings. The state governments are required to use 70 percent of the grant money to develop resources that will encourage the use of alternative fertilisers and alternative fertiliser producing facilities at the district, block, and village levels.

Farmers, panchayats, farmer producer organisations, and self-help groups engaged in fertiliser reduction and awareness raising can be rewarded and encouraged with the remaining 30 percent of the award money. The calculation of reducing chemical fertilisers will be compared to the average consumption of urea during the last three years.