Prime Minister Narendra Modi announced on Wednesday, 15 July 2026 that the government has approved the proposal for the National Urea Investment Policy-2026, describing it as a step toward the welfare of farmers across the country. The policy is designed to incentivise investment in new gas-based urea production plants and is expected to reduce India's dependence on imported urea.

Context

Posting in Hindi on X, PM Modi stated: 'देशभर के अपने किसान भाई-बहनों के कल्याण के लिए हमारी सरकार कोई कोर-कसर नहीं छोड़ रही है' ('Our government is leaving no stone unturned for the welfare of our farmer brothers and sisters across the country'). He added that the approval of the National Urea Investment Policy-2026 would not only encourage investment for setting up new gas-based urea production plants but would also benefit the broader urea sector. The post was shared shortly after the Cabinet-level approval was granted.

Policy Backdrop

India has historically relied on imports to meet 30–40 per cent of its urea demand, making domestic capacity expansion a long-standing policy priority. The government had earlier notified the New Urea Policy 2015, which offered guaranteed buy-back arrangements and fiscal support to attract private and public investment into gas-based urea manufacturing. Between 2016 and 2019, the Cabinet approved the revival of five closed public-sector urea plants at Gorakhpur, Sindri, Barauni, Talcher and Ramagundam, all to be run on natural gas feedstock.

The National Urea Investment Policy-2026 is the next step in this lineage, extending the framework of incentives to draw fresh capital into gas-based production. The Department of Fertilizers under the Ministry of Chemicals and Fertilizers is the nodal body responsible for implementing such investment frameworks and administering the fertilizer subsidy regime.

Stakeholders and Impact

Indian farmers are the primary beneficiaries, as higher domestic urea output is expected to stabilise availability and support the government's policy of keeping urea prices subsidised. Urea manufacturers — both public-sector undertakings and prospective private investors — stand to gain from the investment incentives that the new policy is intended to provide.

Expanded domestic production also aligns with the Atmanirbhar Bharat objective of substituting imported fertilizers with indigenously manufactured alternatives, which could help contain the government's annual fertilizer subsidy expenditure over the medium term.

What's Next

Detailed Cabinet or CCEA notes outlining the specific incentive structure, capital subsidy provisions, and gas pooling arrangements under the National Urea Investment Policy-2026 are expected to be released by the Department of Fertilizers in the coming days. Analysts and industry stakeholders will watch for any new plant proposals or timelines that emerge alongside the formal policy notification. Budget provisions in subsequent Union Budgets will be a key indicator of the government's commitment to scaling up domestic urea capacity under this framework.