Cabinet Clears New Urea Policy to Add 10 MT Capacity
NIPU-2026, the first urea investment framework in nearly 14 years, aims to build 8-9 gas-based plants and end India's import dependence on the fertiliser.
The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, approved the National Investment Policy for Urea-2026 (NIPU-2026) on 15 July 2026, the first major urea investment framework in nearly 14 years. The policy is designed to make India self-reliant in its most widely used fertiliser by adding fresh domestic production capacity.
The government said the framework will facilitate 8-9 new gas-based urea plants with a combined capacity of about 10 million tonnes, enough to offset much of India's current import dependence, according to the Press Information Bureau and multiple reports.
Key Highlights
- CCEA approved NIPU-2026 for Atmanirbhar Bharat on 15 July 2026.
- It is the first urea investment policy in almost 14 years.
- Targets 8-9 gas-based greenfield and brownfield plants.
- Adds a combined capacity of about 10 million tonnes.
- Goal: cut India's dependence on urea imports.
What NIPU-2026 Does
The policy provides a framework of incentives to attract fresh investment into gas-based urea manufacturing. Business Standard reported it will support 8-9 greenfield and brownfield plants totalling 10 million tonnes, while The Hindu BusinessLine said the additional output is intended to completely offset India's current import dependence on the nitrogen nutrient. The New Indian Express reported the Cabinet also cleared a separate infrastructure push worth about Rs 29,300 crore the same day.
NIPU-2026 at a glance
| Detail | Fact |
|---|---|
| Approved by | Cabinet Committee on Economic Affairs |
| Date | 15 July 2026 |
| New plants | 8-9 gas-based (greenfield and brownfield) |
| Added capacity | About 10 million tonnes |
| Objective | Self-reliance; cut urea imports |
Why Urea Matters
Urea is the most widely consumed fertiliser in India, valued for its high nitrogen content and its low price to farmers. Because it is heavily subsidised, demand is large and steady, and any shortfall in domestic output must be met through imports that expose the government to global price swings and the rupee's exchange rate.
Domestic urea is produced mainly from natural gas, which serves as both feedstock and fuel. Building new gas-based capacity therefore ties fertiliser security closely to a reliable, competitively priced gas supply.
Cutting the Import Bill
India has for years imported a meaningful share of its urea to bridge the gap between demand and domestic production. By adding roughly 10 million tonnes of new capacity, the government aims to narrow or close that gap, reduce the foreign-exchange outgo on imports, and insulate farmers and the exchequer from volatile international fertiliser markets.
Analysts note that the benefits will depend on execution: gas-based plants take years to build and commission, and their running economics hinge on the price and availability of natural gas over time.
Part of the Self-Reliance Push
The “for Atmanirbhar Bharat” tag places NIPU-2026 within the government's wider self-reliance agenda across strategic goods. Officials framed the policy as strengthening fertiliser security, a politically sensitive area given agriculture's central role in the economy and rural livelihoods. It sits alongside other domestic-capacity drives in energy and manufacturing.
What It Means for Farmers
For farmers, urea supply and price stability are critical during sowing seasons. A larger, more secure domestic supply is intended to reduce the risk of shortages and reliance on imports at harvest-sensitive times, though retail prices ultimately depend on the subsidy regime the government maintains.
Frequently Asked Questions
What is NIPU-2026?
The National Investment Policy for Urea-2026, a framework to attract investment in gas-based urea plants and boost domestic production.
How much capacity will it add?
About 10 million tonnes across 8-9 new gas-based plants.
Why is it significant?
It is the first urea investment policy in nearly 14 years and targets self-reliance in India's most-used fertiliser.
Why does India import urea?
Domestic production has not fully met demand, so imports bridge the gap and expose the country to global price swings.
Who approved it?
The Cabinet Committee on Economic Affairs, chaired by the Prime Minister, on 15 July 2026.