The Indian government recently announced measures to kick-start the home production of urea, taking a significant step towards the goal of “Atmanirbhar Bharat“.
Crux of the Matter
The Indian government recently announced the commission of 4 new urea plants in the country, which would be done before 2021. Besides the four, the Talcher plant in Odisha is expected to be functioning by 2023.
The first plant would be situated in Ramagundam in Telangana, with the whole project costing ₹5,500 crores. The plant would be developed by Ramagundam Fertilisers & Chemicals, which is a joint venture of National Fertilisers, Engineers India and Fertilisers Corporation of India Ltd (FCIL).
Gorakhpur, Sindri and Barauni Plants
The next three plants are located in Gorakhpur (Uttar Pradesh), Sindri (Jharkhand) and Barauni (Bihar). These plants would be set up by Hindustan Urvarak & Rasayan, which is a joint venture of Coal India Ltd (CIL), NTPC, Indian Oil Corporation (IOC), and FCIL. Each project would cost ₹ 7,000 crores.
The first 3 plants would be operating on imported natural gas, and are expected to be functional before the next rabi crop season.
The last plant of the project is located in Talcher in Odisha, which is expected to be functioning by 2023. Unlike the previous plants, the Talcher plant would operate on coal and would produce a complex of ammonia-urea.
Currently, the project is being revived by Talcher Fertilizers Ltd (TFL), which is a joint venture forged by GAIL India Ltd, Coal India Ltd (CIL), Rashtriya Chemicals & Fertilizers Ltd (RCF) and FCIL
However, the contract for the project has been awarded to the Chinese firm Wuhan Engineering Co. Ltd and would cost ₹13,300 crores.
Impact On Urea Import
- In 2019-20, India imported 11 million tonnes (mt) of urea worth $ 2.89 billion. Out of the 11 mt, 2.9 mt of it was imported from China and cost $ 854 million.
- Each of the 5 new plants would produce 1.27 mt urea yearly, poising India for negligible imports by 2023-24.
- The new plants would reduce India’s dependency on China for urea import amidst recent clashes on border, which have led to the boycott of Chinese products in the country, with the recent ban on 59 Chinese apps being the latest example.
History Of Urea Production In India
- Urea is primarily used for fertiliser production in India.
- The Indian government started subsidizing fertilisers after the Green Revolution.
- In 1977, the usage of NPK (nitrogenous, phosphatic, and potassic) fertilisers was 24.9 kg/hectare.
- In 2019, the usage reached 137.6 kg/hectare.
- Several experts have criticized the overuse of urea in fertilisers in India. 64% of the Govt subsidy on fertiliser production is on urea only, consequently leading to its overuse which has degraded the soil and has reduced the efficiency of crop production.
- While the ideal ratio of NPK (Nitrogen-Phosphorous-Potassium) fertiliser (where Nitrogen is formed by Urea) by compounds is 4: 2: 1, in 2015, the ratio was 7.23: 2.9: 1.
Similarly, the crop response ratio has decreased due to the overuse.
In 1970, the average rate was 13 kg grains/kg fertiliser, which diminished to 3.7 kg grains/kg fertiliser in 2005.
- Several critics have pointed out the possibility of significant increase in fertiliser cost due to home production. While India currently imports at the rate of $240/tonne, the cost could rise to $310-330/ tonne by expert estimations.
- Several experts have observed the benefits of the move as well. The location of plants, in possibly the next Green revolution sites, along with Govt aid for home production, might reduce the price difference of the fertilisers.
- The home production is also expected to generate significant employment, with the Talcher plant alone expected to create 10,000 jobs.
- Industrialists in the country have long expressed the lack of production at home, with an increase of only 4.4 million tonnes between 2001 and 2019, compared to the manifold increase in the overall consumption.
- The move is also labelled as “morale booster” amidst the recent strategy of reducing business with China.
- Urea was first discovered in urine in 1727 by the Dutch scientist Herman Boerhaave, although this discovery is often attributed to the French chemist Hilaire Rouelle.
- In 1828, the German chemist Friedrich Wöhler obtained urea artificially by treating silver cyanate with ammonium chloride. This was the first time an organic compound was artificially synthesized from inorganic starting materials, without the involvement of living organisms.
- Justus Freiherr von Liebig was a German scientist who made major contributions to agricultural and biological chemistry. He has been described as the “father of the fertilizer industry” for his emphasis on nitrogen and trace minerals as essential plant nutrients, and his formulation of the law of the minimum.
- Financial Express – India’s fertiliser drain: Urea of darkness
- The Indian Express – Five new plants coming by 2023, first atmanirbhar boost may be in urea
- Business Standard – Talcher fertilizer plant to start urea production in September 2023
- The Hindu Business Line – Soil health still far from ideal; excessive use of urea fertilisers continues