India is a noted agrarian economy and agriculture along with its allied activities support livelihoods of a significant section of the country's population.
Agriculture contributes significantly to the Indian economy, accounting for more than 18.5% of the GDP of the country. With close to 60% of the Indian population being dependent on this industry, agriculture acts as a key revenue generator for the country. The fertilizer sector in India plays a pivotal role in ensuring the supply of primary and secondary nutrients in order to produce the most premium quality agricultural produce.
This report: Snapshot: Fertilizer Sector in India provides a detailed analysis of the industry and focuses on market dynamics, growth trends, major players, recent developments and key drivers of the Indian fertilizer sector. The report also highlights the challenges faced by the market and outlines the scope of the market.
India is the third largest producer and consumer of fertilizers in the world after the United States and China. Urea, DAP, MOP and complexes are the major fertilizers used in India which are used to provide essential nutrients like nitrogen, phosphate and potash to the soil to ensure a healthy crop. Among the various fertilizers, urea holds majority of the market share in terms of volume consumption, though the other fertilizers sections have also been witnessing steady growth. High subsidies provided in this sector alongwith the new investment policies proposed by the government are expected to draw in funds in the fertilizer market over the period of the next five years.
The demand for fertilizers in the country has been growing due to the exponential increase in demand for food grains on account of the country's growing population. The Indian government has also introduced several initiatives such as Bringing Green Revolution in Eastern India (BGREI) and National Food Security Act to drive up the consumption of fertilizers in the country.
Key players and regions
India primarily depends on importing phosphate and potash raw materials for the production and distribution of complex fertilizers. The decrease in the prices of phosphate and potash in the international market is expected to accelerate the demand for phosphate and potash fertilizers in the country. Urea being the most widely consumed fertilizer in the country, primarily in the north and south regions, the feedstock for urea, i.e. natural gas, is also imported in the form of liquefied natural gas from Gulf nations to sustain the increased demand. Moreover, the new investment policy for urea is likely to increase investments in the urea sector. Though IFFCO, RCF and NFL are currently the leading fertilizer producers in the country, the lucrative government initiatives are expected to draw in some major investments in the sector.
Market experts predict that India's food grain requirement to feed the estimated population of 1400 million by 2025 will be close to 300 million tonnes. There will also be a corresponding increase in requirement of other crops such as cotton, sugarcane, fruits and vegetables. Consequently the country is also projected to require about 45 million tonnes of nutrients, i.e. fertilizers, organic manures and bio fertilizers by the forecast period. Fertilizer market in India is thus expected to continue to remain indispensable in its contribution towards the development of agriculture in India.
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Fertilizer Industry Structure, Fertilizer Installed capacity, Urea manufacturing units