Govt to fast track talks with Iran for urea plant.

The Government proposes to fast track the process of setting up the proposed urea-ammonia plant in Iran through a joint venture with the West Asian country that is rich in energy resources.

'We are keen to fast track the Iran initiative. A delegation is expected to visit Iran soon to expedite bilateral discussions in this regard,' a Fertiliser Ministry source said.

A consortium of State-owned-entities such as Rashtriya Chemicals and Fertilisers, Gujarat Narmada Valley Fertiliser Corporation and Gujarat State Fertiliser Corporation has been proposed to set up the fertiliser plant in Iran with a local partner.

India is a net importer of urea and the proposed plant will help in assured supplies and result in huge savings for the government. 'It is cheaper and economical to produce in Iran and bring it to India through a long term off-take arrangement,' the source said.

The proposed urea-ammonia joint venture plant in Iran would be on the lines of the OMIFCO (Oman India Fertiliser Company) in Oman, where the Indian entities have jointly invested in urea manufacturing with local player.

OMIFCO is owned 50 per cent by the Oman Oil Company SAOC, 25 per cent by the Indian Farmers Fertiliser Co-operative and the rest by Krishak Bharati Co-operative Ltd. The Government of India has a long term off-take arrangement with OMIFCO for sourcing urea.

India currently imports about nine million tonnes of urea to meet the domestic shortfall. Urea production in India is stagnant around 22 million tonnes, while the domestic consumption ranges between 30 and 31 million tonnes.

The Centre has placed emphasis on reviving about half-a-dozen closed fertiliser units in places such as Sindri, Barauni, Gorakhpur and Ramagundam, a move aimed at achieving self-sufficiency in urea production over the next five years.

No new urea capacity has been added in the past 14 years due to lack of an appropriate policy framework, which had resulted in widening demand-supply gap.

Urea is highly subsidised and the government has ruled out any price increase or cut in subsidy.

Moreover, in a move aimed at improving the nitrogen use efficiency of urea and boost farm productivity, the Government has recently done away with the 35 per cent cap on neem-coated urea production for the domestic nutrient makers.


HBL