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The Cabinet Committee on Economic Affairs (CCEA) has approved the National Investment Policy for Urea-2026 for Atmanirbhar Bharat (NIPU-2026) to promote domestic urea production, reduce import dependence and strengthen India's fertilizer security.

About NIPU-2026

The National Investment Policy for Urea-2026 (NIPU-2026) is a sector-specific investment policy designed to promote the setting up of new natural gas-based urea manufacturing plants in India. It succeeds the New Investment Policy (NIP), 2012, whose investment window expired in October 2019.

The policy seeks to bridge India's growing demand-supply gap in urea by encouraging fresh investments through a transparent and investor-friendly framework, thereby advancing the vision of Atmanirbhar Bharat in the fertilizer sector.

Key Features

• NIPU-2026 aims to create 10 million tonnes (MT) of additional domestic urea production capacity through the establishment of 8–9 new natural gas-based fertilizer plants.
• To improve transparency and efficiency, the policy separates fixed and variable costs while calculating government support, replacing the earlier cost structure under NIP-2012.
• The policy also introduces an assured Return on Equity (RoE) ranging from 12% to 16%, providing greater investment certainty and encouraging both public and private sector participation.
• To protect investors from currency volatility, fixed costs can be converted into Indian Rupees (INR) after four years based on prevailing exchange rates, thereby reducing foreign exchange risk.
• The revised framework is also expected to generate savings of over ?250 crore per plant compared to the earlier policy by improving cost efficiency and transparency.
• Additionally, the policy provides a single-window mechanism for evaluating pending investment proposals received by the Department of Fertilizers, facilitating faster project implementation.

Significance

India continues to face a urea production deficit of nearly 10 million tonnes, resulting in significant import dependence. NIPU-2026 aims to bridge this gap by expanding domestic manufacturing capacity, strengthening fertilizer security and reducing the import bill.

By promoting modern natural gas-based plants, the policy is expected to improve production efficiency while encouraging long-term investments through a stable policy framework and assured returns. This will contribute to Atmanirbhar Bharat, enhance farmers' access to fertilizers and strengthen India's food security.