New Urea Policy to help profitable companies

Details: Category: Industrial Policies

To overcome severe shortage of urea in the country, the new policy allows fertilizer companies to get a subsidy with a ceiling of $425 a tonne to the floor price of $ 250. This is in contrast with earlier policy of cost –plus method. According to this policy, any company which produces urea in their existing capacity will get import-parity price for 85% of its production, while those who produce additional urea with brownfield expansion will get subsidy for 90% of their production. However, only companies with cash-flow and deeper pockets can fund their expansion, knowing that lack of feedstock infrastructure.

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