Complex fertilizers in the country have installed capacity of 6.4 million tonnes from 19 units.The scope of the Indian fertilizer industry was positive for 2014-15, according to the ratings agency ICRA . But a sluggish recovery is in the offing for the industry as it continues to face significant challenges, especially the gas price hike.
There had been a relatively moderate overall volume growth in 2014-15 with imports of non-urea fertilizers expected to grow by 15%-20%, While urea sales volumes continued to grow at a stable long-term average of 3%, non-urea fertilizers witnessed significant volume decline.
ICRA also noted that the subsidy provisioning for 2014-15 at Rs 68,000 crore would be substantially lower than the estimated requirement of about Rs 1.1 lakh crore .As a result, the subsidy gap will rise from around Rs 37,000 crore at the end of 2013-14 to about Rs 41,000 crore at the end of 2014-15 unless any reform measures are implemented for the industry.
On the positive side, the government has increased the fixed cost compensation for urea by approving the modified NPS-III according to which there had been an increase in the fixed cost of urea by Rs 350 per tonne.