The public sector enterprise Rashtriya Chemicals and Fertilizers (RCF) is currently investigating the option of sourcing the necessary grade of rock phosphate from Mauritania. Meanwhile, various Indian fertilizer companies are in the process of finalizing memoranda of understanding (MoUs) with suppliers from Togo as part of India’s initiative to secure a steady supply of crop nutrients.
According to a report from the Parliamentary Standing Committee on Chemicals and Fertilizers, chaired by Rajya Sabha MP Kirti Azad, the Indian government has been encouraging domestic fertilizer companies to establish agreements, MoUs, and joint ventures with suppliers from mineral-rich nations. This effort aims to guarantee a consistent supply of raw materials, intermediates, and finished fertilizers.
The report highlights that the Department of Fertilizers has initiated discussions with representatives from several countries, including Togo, Nauru, Russia, and Belarus, to explore potential agreements for procuring raw materials at competitive prices. Currently, discussions are underway for an MoU between Indian and Togolese fertilizer companies for the supply of rock phosphate, while RCF is looking into sourcing rock phosphate from Mauritania.
The committee acknowledged that the mission of the Department of Fertilizers is to ensure that quality fertilizers are adequately and timely available at affordable prices for the 140 million farmers in India during each cropping season, achieved through systematic production, imports, and distribution. Furthermore, the committee urged the government to seriously consider the feasibility of acquiring mining leases from countries rich in raw materials.
However, the committee expressed concern over a recent change in policy regarding the preferential allotment of mineral mines for fertilizer public sector units (PSUs). The Ministry of Mines has now classified phosphatic and potassic minerals as “Critical and Strategic Minerals,” allowing them to be auctioned to maximize state revenue. This change requires fertilizer companies to participate in auction processes to secure any new mining rights.
The committee noted the apparent contradiction in the fact that while the fertilizer sector was categorized as a ‘Non-Strategic Sector’ requiring divestment of fertilizer PSUs, phosphatic and potassic minerals have been classified as “Critical and Strategic Minerals.” Given the historical contribution of fertilizer PSUs to the country’s fertilizer production, the committee has recommended that these units should be given priority in the allotment of mineral mines.
Additionally, the committee suggested that despite the government’s implementation of direct benefit transfer (DBT) for fertilizers since 2018—making 100% subsidy payments to manufacturing companies based on actual sales—now is the time to consider rolling out direct cash transfers.
The committee appreciated the initiative to potentially utilize the PM-KISAN database to implement a pilot Direct Cash Transfer project in selected districts, based on the data of farmers as maintained by the Agriculture Ministry. They noted that in July 2024, the Department of Fertilizers would collaborate with the Agriculture Ministry to develop a module for determining entitlements using the land, cropping patterns, and soil health data of farmers.
