Skip to content

Urea Fertilizer Subsidy and Nano Urea Policy

Urea is the most consumed fertilizer in India and is sold under statutory price control by the Department of Fertilizers under the Ministry of Chemicals & Fertilizers. The Centre reimburses the difference between the cost-plus price for manufacturers and the statutorily fixed maximum retail price (MRP) of urea as a subsidy. To curb over-application and reduce import dependence, IFFCO Nano Urea (liquid) was introduced commercially in 2021 as a foliar substitute.

Overview

Urea pricing is administered under the New Urea Policy and successor notifications of the Department of Fertilizers. The MRP for a 45-kg neem-coated urea bag has been pegged at approximately Rs 268 since 2018, while production economics have pushed the per-bag subsidy reimbursement to roughly Rs 2,300 at recent natural-gas costs.

Eligibility

All farmers purchasing neem-coated urea from licensed retail outlets through the integrated Fertilizer Monitoring System (iFMS) point-of-sale (PoS) infrastructure receive the benefit automatically through the controlled retail price. Aadhaar identification of the buyer at the PoS terminal underpins the DBT-to-manufacturer claim.

Benefit and structure

  • Urea MRP (45-kg neem-coated bag): approximately Rs 268, statutorily fixed since 2018
  • Manufacturer reimbursement: cost minus MRP, paid by the Centre on PoS-validated sales
  • Nano Urea: IFFCO Nano Urea (liquid) launched into commercial production on 1 August 2021 at the IFFCO Kalol plant; ICAR-KVK field trials across 94 crops reported an average yield gain of approximately 8% with foliar Nano Urea
  • Nano Urea is not subsidised; a 500 ml bottle is priced close to a 45 kg urea bag

Implementation

The Department of Fertilizers operates the integrated Fertilizer Monitoring System (iFMS) with PoS devices at retail outlets, releasing subsidy on a per-bag DBT basis to manufacturers. The policy interacts with the Nutrient-Based Subsidy regime for P&K fertilizers (see Fertilizer Subsidy Policy) and with promotion of integrated nutrient management through ICAR-KVKs (see Kvk Bio Input Resource Centre).

See also Fertilizer Subsidy Policy, Pmksy Micro Irrigation Subsidy and Kvk Bio Input Resource Centre.

References

  1. Urea Policy: Pricing and Administration. Department of Fertilizers.
  2. Year-end Review 2022. Department of Fertilizers, Press Information Bureau.