Union Parliamentary Affairs Minister Kiren Rijiju on Thursday, July 16, 2026, announced that the Union Cabinet has approved the National Investment Policy for Urea-2026 (NIPU-2026), a new framework aimed at attracting fresh investment into gas-based urea manufacturing and reducing India's dependence on imported fertilizers.

Context

Posting on X, Rijiju stated that the policy — cleared under the leadership of Prime Minister Narendra Modi — is designed to 'encourage new investments in gas-based urea manufacturing units across the country' and to 'advance India's goal of self-sufficiency.' The announcement was tagged under #CabinetDecisions, signalling it as part of the broader post-cabinet communication drive.

The Department of Fertilizers, which operates under the Ministry of Chemicals and Fertilisers, had moved the proposal for NIPU-2026. The policy is framed within the Atmanirbhar Bharat self-reliance programme that Prime Minister Modi launched in 2020, which had identified agri-inputs including fertilizers as a priority sector.

Policy Backdrop

India currently meets only around 80 percent of its urea demand through domestic production, with the remainder sourced from countries including China, Oman, and other suppliers. This import dependence has long been a pressure point for both the agriculture budget and India's energy-security calculus.

The government has pursued a series of policy interventions to close this gap. The New Investment Policy for Urea (2012) was the first structured attempt to attract capital into the sector, followed by the New Urea Policy 2015, which introduced fiscal incentives and pricing reforms to expand domestic capacity. NIPU-2026 represents the latest iteration of this multi-decade effort, with a specific focus on gas-based plants that align with the expanding natural gas pipeline network across the country.

Successive administrations have favoured gas-based urea manufacturing for its relatively lower carbon footprint compared with naphtha-based or coal-based alternatives, and because expanded pipeline infrastructure now makes natural gas more accessible to potential plant sites across India.

Stakeholders and Impact

The policy's primary beneficiaries are expected to be fertilizer manufacturers looking to set up or expand urea production capacity, and ultimately Indian farmers who depend on affordable and reliable urea supply for kharif and rabi crops. Urea is the most widely used nitrogenous fertilizer in India and plays a central role in food security.

For industry, the approval of a dedicated investment policy signals that the government intends to provide a stable and predictable regulatory environment for new capital commitments in the sector. The emphasis on gas-based units is also expected to align new projects with India's broader energy transition goals.

What's Next

The Cabinet approval marks the beginning of the implementation phase. Stakeholders and analysts will now watch for the formal gazette notification of NIPU-2026 guidelines, specific financial incentive structures, and any follow-up budgetary allocations that back the policy with public funds. Parliamentary questions on implementation timelines and investment commitments are also likely as the policy moves from announcement to execution.

If NIPU-2026 succeeds in attracting significant new capacity, it could meaningfully reduce India's urea import bill and strengthen the country's food-production supply chain — a goal that has eluded full realisation despite more than a decade of targeted policy effort.