Syllabus: GS3/Economy
Context
- Nearly 90% of the urea consumed in India is import-dependent.
About
- Since the Green Revolution, India has relied on urea to supply the nitrogen essential for higher crop yields.
- Urea accounts for 56% of all fertilisers consumed and nearly 80% of all nitrogenous fertilisers.
- Over 80% of domestic urea is produced using imported natural gas, and more than a fifth of the total consumption is imported.
What is Urea?
- Urea is a chemical compound with the formula CO(NH₂)₂.
- It contains about 46% nitrogen (N), which is the highest nitrogen content among solid fertilizers.
- Use:
- Promotes leafy growth (important for crops like rice, wheat, maize).
- Enhances protein formation in plants.
Why India Import Urea?
- High Demand from Agriculture: India has a large agrarian economy with crops like rice and wheat that require heavy nitrogen use. Urea is the most preferred fertilizer because it is cheap and effective.
- Insufficient Domestic Production: Although India has many urea plants, production is not enough to meet total demand.
- Some plants are old and inefficient, leading to lower output and setting up new plants requires high investment and time.
- Dependence on Natural Gas: Urea is produced using natural gas as a key input. India is not self-sufficient in natural gas, leading to higher production costs, and limited expansion of domestic urea production.
- Cost Advantage of Imports: Sometimes, importing urea from countries is cheaper than producing it domestically.
Concerns
- High Fiscal Burden: Heavy subsidy on urea increases the government’s fertilizer subsidy bill and strains public finances.
- Imbalanced Fertilizer Consumption: Excessive use of urea (nitrogen) compared to phosphatic and potassic fertilizers disturbs the N:P:K ratio, reducing soil productivity.
- Low Nitrogen Use Efficiency (NUE): Only a part of applied urea is utilized by crops; the rest is lost through volatilization, leaching, and denitrification.
- Soil Degradation: Continuous overuse leads to soil acidification, micronutrient deficiency, and long-term fertility decline.
- Environmental Pollution: Causes water pollution (eutrophication) due to nitrate runoff, emits nitrous oxide (N₂O), a potent greenhouse gas.
- Import Dependence & External Vulnerability: Reliance on imported urea and natural gas exposes India to global price volatility and supply disruptions.
Recommendations
- Shift policy focus: Reorient the National Green Hydrogen Mission towards domestic green urea production instead of export-centric green ammonia.
- Integrate CCUS with urea plants: Use carbon capture funding to ensure dedicated CO₂ supply for urea manufacturing.
- Curb overuse & improve efficiency: Enhance nitrogen use efficiency (NUE) and promote sustainable/organic farming.
- Undertake structural reforms: Move towards phased decontrol and market competition to boost efficiency, innovation, and reduce subsidy burden.
Government Initiatives
- Neem-Coated Urea (NCU): Mandatory coating of urea with neem to reduce nitrogen loss, improve efficiency, and prevent diversion to non-agricultural uses.
- Nutrient-Based Subsidy (NBS) Scheme: Promotes balanced fertiliser use (N:P:K) by subsidising phosphatic and potassic fertilisers, reducing overdependence on urea.
- Direct Benefit Transfer (DBT) in Fertilisers: Subsidy is transferred to companies after sale to farmers, ensuring transparency and reducing leakages/diversion.
- Promotion of Nano Urea: Developed by Indian Farmers Fertiliser Cooperative Limited, Nano Urea reduces conventional urea requirement while maintaining crop yield.
- Soil Health Card Scheme: Provides farmers with soil nutrient status, encouraging judicious and need-based fertiliser use.
Source: IE
