Proposed divestment of 8 fertiliser PSUs put on hold

The government has put off the proposed privatisation of eight state-run fertiliser companies as it looks to ramp up local production to reduce dependence on imports.

A decision to this effect was taken at a meeting last month attended by officials from the Department of Public Enterprises (DPE), Department of Investment and Public Asset Management (DIPAM), Department of Economic Affairs and Department of Fertilisers, people aware of the developments told ET.

"Though fertiliser is a non-strategic sector, the general consensus was that this is not the time to divest fertiliser PSUs for at least 2-3 years," a senior official told ET.

Niti Aayog had earlier identified eight public sector fertiliser companies including Rashtriya Chemicals & Fertilizers (RCF) and National Fertilizers (NFL) for strategic sale.

The government is proposing to aggressively expand the domestic production of urea to cut imports by at least 30% by 2024. With green energy production likely to increase sharply, the government feels domestic production can be ramped up.



India imported $10.8 billion worth of fertilisers in April-November 2022, up 63% from a year earlier.

The fertiliser subsidy bill almost doubled to ₹1.57 lakh crore in FY22 from ₹83,000 crore in FY20, as international prices jumped post-Ukraine-Russia conflict.

Economists expect the overall fertiliser subsidy to rise further to around ₹2.5 lakh crore in FY2023.

The move is in line with the Centre's plan to come up with a national fertiliser policy to revive closed fertilisers companies and enhance the production capacity of existing functional plants.

The Centre is also working on the revival of four plants of Fertilizer Corporation of India Ltd (FCIL) at Talcher, Ramagundam, Gorakhpur and Sindri and the Barauni plant of Hindustan Fertilizer Corporation Ltd (HFCL).

"We are aiming for ending our dependence on imported urea by 2025... our five new plants will be commissioned by then," fertiliser minister Mansukh Mandaviya had said earlier.

India's total production of fertilisers including urea was 43.6 million tonnes in FY22. The total fertiliser import was 18.2 million tonnes.