Government Approves National Investment Policy for Urea-2026 (NIPU-2026)

The Union Cabinet has officially approved the National Investment Policy for Urea-2026 (NIPU-2026), a strategic initiative designed to bolster India’s self-reliance in fertilizer production. As India remains one of the world's largest consumers of urea, the country has historically relied on significant imports to meet the demand-supply gap. NIPU-2026 seeks to address this structural vulnerability by incentivizing the establishment of new gas-based urea plants and the expansion of existing capacities. A core feature of the policy is the revision of the Return on Equity (RoE) for manufacturers, now set between 12% and 16%. This adjustment is intended to attract private investment and provide a stable financial environment for capital-intensive projects. By introducing new financial mechanisms tailored for gas-based production, the government aims to add approximately 10 Million Metric Tonnes (MMT) of domestic production capacity. This move is expected to stabilize fertilizer prices for farmers, reduce the fiscal burden of import subsidies, and strengthen the domestic supply chain.