India allows use of ammonia in agriculture to cut import dependence in Urea
A move to permit the direct use of ammonia in agriculture, rather than only as an input for manufacturing urea, is being taken up to reduce India's dependence on imported urea.
Industry sources indicate that if implemented successfully, India would become only the fourth country — after the United States, Canada, and Australia — to use ammonia directly in farming rather than converting it to urea first.
The move is aimed at cutting the foreign exchange outflow and subsidy burden associated with India's large urea import requirement.
Direct ammonia application would require specialised handling, storage, and application infrastructure given the chemical's hazardous properties.
Urea vs. Direct Ammonia Application — The Agronomic and Chemical Distinction
Urea (chemical formula CO(NH2)2) is a solid, granular nitrogen fertiliser manufactured by reacting ammonia (NH3) with carbon dioxide under high pressure and temperature (the Haber-Bosch/urea synthesis process). Anhydrous ammonia can instead be injected directly into soil as a fertiliser, skipping the urea manufacturing step; it is a gas at room temperature and must be stored and applied under pressure, making it more hazardous but often more efficient.
Key Details
- Direct-injected anhydrous ammonia typically achieves higher nitrogen-use efficiency (commonly cited in the 70-85% range) compared with surface-broadcast urea (roughly 50-65%), because it is retained in the soil with less volatilisation loss.
- Only a small number of countries with large-scale mechanised farming — the United States, Canada, and Australia — have established direct ammonia application as a mainstream farming practice, owing to the specialised injection equipment, storage, and safety protocols required.
- India's fertiliser consumption has so far been almost entirely urea-based, with ammonia used domestically as a manufacturing intermediate rather than a field-applied input.
Allowing direct ammonia use would let India import or produce ammonia and apply it straight to fields, bypassing a stage of urea manufacturing and potentially reducing costs and import dependence, but it requires India to build the specialised handling and application infrastructure that currently exists only in a few countries.
India's Urea Import Dependence and Subsidy Burden
India is among the world's largest urea consumers and importers, with domestic production falling short of annual demand. This gap is filled through imports, primarily from Gulf countries such as Oman, Qatar, Saudi Arabia, and the UAE, and is subsidised heavily by the central government to keep farm-gate prices low.
Key Details
- India's annual urea demand is estimated at around 40 million tonnes against domestic production of roughly 30 million tonnes, leaving an import dependence of about 25-30% of total requirement.
- India's overall fertiliser subsidy bill has been budgeted at approximately ₹1.71 lakh crore for the current financial year, with urea accounting for the bulk of this subsidy under the Nutrient Based Subsidy and urea-specific subsidy mechanisms.
- The Union Cabinet approved the National Investment Policy for Urea-2026 (NIPU-2026) to encourage new domestic gas-based urea plants and cut import dependence, targeting roughly 10 million tonnes of additional domestic capacity.
- India is also among the largest global importers of ammonia itself (over 2 million tonnes annually), used as feedstock by domestic urea and other fertiliser plants.
Permitting direct ammonia application is being framed as a complementary lever to NIPU-2026 — rather than only building new urea plants, some import dependence and subsidy outgo could be addressed by applying ammonia (imported or domestically produced) directly to farmland.
Fertiliser Control Order, 1985 — The Regulatory Framework
The Fertiliser (Control) Order, 1985, issued under the Essential Commodities Act, 1955, is the principal regulatory instrument governing fertiliser quality standards, specifications, packaging, labelling, pricing, and distribution in India. Any new fertiliser product or application method — including direct agricultural use of ammonia — needs to be notified and brought within this regulatory framework before large-scale adoption.
Key Details
- The FCO prescribes standards for over sixty fertiliser grades and mixtures currently permitted for sale in India; new products require specification notification by the Department of Fertilisers, Ministry of Chemicals and Fertilisers.
- Handling anhydrous ammonia (a hazardous chemical) also brings it within the ambit of safety regulations enforced by bodies such as the Petroleum and Explosives Safety Organisation (PESO), given its toxicity and pressurised storage requirements.
- Any move to formally allow direct farm application of ammonia would require corresponding amendment or notification under the FCO alongside safety clearances.
For direct ammonia use in farming to move from an industry proposal to field-level practice, it must be formally notified under the FCO and cleared on handling-safety grounds — a regulatory and infrastructure threshold that has kept the practice limited to a handful of countries globally.
- Only three countries currently use ammonia directly in farming at scale: the United States, Canada, and Australia; India would become the fourth if the move succeeds.
- India's annual urea demand: approximately 40 million tonnes; domestic production: approximately 30 million tonnes; import dependence: approximately 25-30%.
- India's fertiliser subsidy budget (current financial year): approximately ₹1.71 lakh crore.
- Direct-injected anhydrous ammonia nitrogen-use efficiency: approximately 70-85%, versus approximately 50-65% for broadcast urea.
- National Investment Policy for Urea-2026 (NIPU-2026): approved to add roughly 10 million tonnes of domestic urea capacity via new gas-based plants.
- Regulatory basis for fertiliser standards in India: Fertiliser (Control) Order, 1985, under the Essential Commodities Act, 1955.