16 July 2026, New Delhi: The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved the National Investment Policy for Urea-2026 for Atmanirbhar Bharat (NIPU-2026), a new framework aimed at attracting fresh investments in domestic urea manufacturing and reducing India’s dependence on imports.
The policy, proposed by the Department of Fertilizers, seeks to encourage the establishment of new gas-based urea production units across the country, supporting the government’s broader objective of achieving self-sufficiency in urea production.
Under NIPU-2026, several changes have been introduced compared to the earlier New Investment Policy (NIP)-2012. The revised framework separates fixed and variable costs to improve transparency, introduces a Return on Equity (RoE) range with a minimum of 12% and a maximum of 16%, and provides a mechanism to mitigate foreign exchange risk by converting fixed costs into Indian Rupees after four years based on prevailing exchange rates.
According to the government, these changes are expected to improve the financial viability of new projects while generating savings of more than ₹250 crore per plant compared to projects established under the 2012 policy.
The policy will serve as the framework for approving and supporting new gas-based urea manufacturing facilities in India.
The government introduced the original New Investment Policy in 2012 to promote investments in urea production through revamp, expansion, revival, brownfield and greenfield projects. Under that policy, six new urea plants were commissioned, including four developed through joint ventures involving public sector enterprises and two established by private companies. The investment window under NIP-2012 concluded in October 2019.
India currently has 33 operational urea manufacturing units with a combined reassessed installed capacity of 269.42 lakh metric tonnes (LMT). Despite this capacity, domestic production continues to fall short of national demand, requiring substantial urea imports each year.
The Department of Fertilizers noted that it has received multiple proposals for setting up new urea plants, underscoring the need for a fresh investment policy to facilitate future capacity expansion.
The approval of NIPU-2026 is expected to provide a renewed policy framework for investment in the sector, strengthen domestic fertilizer production, and contribute to India’s long-term fertilizer security and the Atmanirbhar Bharat initiative.
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