Gujarat Chief Minister Bhupendra Patel on Tuesday, 16 June 2026, praised Gujarat Narmada Valley Fertilizers and Chemicals Limited (GNFC) for its role in eliminating the black-market trade in subsidised urea through neem coating, crediting Prime Minister Narendra Modi's policy direction for the achievement.

Posting in Gujarati on X, the Chief Minister wrote: 'માનનીય મોદીજીના દિશાદર્શનમાં ખાતરનું નીમ કોટિંગ કરીને GNFC એ યુરિયાના કાળાબજાર અટકાવવામાં અને ખેડૂતોના હિતનું રક્ષણ કરવામાં ખૂબ મોટી ભૂમિકા ભજવી છે.' In English: 'Under the guidance of honourable Modiji, by coating fertilizer with neem, GNFC has played a very significant role in preventing the black market in urea and protecting the interests of farmers.'

Context

The post highlights GNFC's implementation of the neem-coated urea policy at its plant in Bharuch, Gujarat. The Chief Minister's remarks position Gujarat as a committed partner in a nationally mandated reform, with the state PSU serving as a frontline executor of the policy.

The neem-coating mandate was introduced by the Union government in May 2015, requiring that 100 percent of all subsidised urea sold in India be coated with neem oil. The measure was designed specifically to prevent urea — which carries a heavy government subsidy — from being diverted to industrial users or sold illegally at inflated prices.

Policy Backdrop

Before the mandate, subsidised urea was frequently diverted from its intended agricultural use and sold on the black market to chemical and industrial buyers who could pay higher prices. Farmers, the intended beneficiaries, often faced artificial shortages as a result.

Neem oil renders urea unsuitable for most industrial applications while also functioning as a slow-release agent that can improve soil nitrogen retention. The Modi government framed the policy as a dual-benefit reform — protecting the fertilizer subsidy bill while simultaneously improving agronomic outcomes for farmers.

Since 2014, the central government has pursued broader fertilizer-subsidy rationalisation through mechanisms including direct-benefit transfers and capacity expansion by public-sector undertakings. GNFC, as a Gujarat state PSU, has been cited by state authorities as an early and large-scale adopter of the neem-coating requirement.

Stakeholders and Impact

The primary beneficiaries of the policy are India's farming communities, who depend on affordable urea during the kharif and rabi sowing seasons. Diversion of subsidised urea to the black market had historically driven up input costs for small and marginal farmers who could not absorb price shocks.

For GNFC, the policy has reinforced its public-interest mandate. The company's Bharuch facility produces urea that feeds agricultural demand across Gujarat and neighbouring states. State officials have consistently pointed to the PSU's compliance as evidence of Gujarat's alignment with central agricultural welfare priorities.

What's Next

Attention will now focus on whether the impact of neem-coated urea on black-market incidents holds through the 2026 kharif season, as demand for subsidised inputs peaks. Any fresh budgetary allocations for fertilizer subsidies in the forthcoming Union Budget will also determine the scale at which PSUs like GNFC can sustain and expand production under the neem-coating framework.

Chief Minister Patel's public endorsement of the scheme ahead of the sowing season signals that Gujarat intends to keep agricultural welfare and fertilizer access at the centre of its policy messaging in the months ahead.