India OKs investment policy to boost manufacturing of urea

Last Updated: Fri, Dec 14, 2012 19:11 hrs

NEW DELHI, Dec 13 (Reuters) - India approved a new policy to encourage investment in urea manufacturing, a senior minister told reporters on Thursday, a move likely to expedite $6.5 billion in projects that have been held back and to reduce the country's reliance on imports.

Under the new policy, manufacturers would get help in covering the cost of natural gas, the preferred feedstock to make urea, when high gas prices would make projects lose money.

Private-sector companies such as Tata Chemicals and Coromandel International and state-run companies National Fertilizers and Rashrtiya Chemicals and Fertilisers are expected to benefit.

Nitrogenous urea, India's most subsidised fertiliser, is also its the leading soil nutrient in the country.

Indian farms last year used about 52 million tonnes of fertilisers, and urea alone accounted for about half of it. State-run and private companies together produce about 19 million tonnes of urea, and the rest is imported from the Gulf and Africa. ($1 = 54.24 rupees) (Reporting by Nigam Prusty; editing by Jane Baird)

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