New Delhi: Industry body Confederation of Indian Industries (CII) has hailed the new urea pricing policy announced on 8 August, saying it would help to attract fresh investments in the sector and reduce India’s dependence on the import of fertiliser.
The new investment policy, based on the recommendations of the Abhijit Sen Committee, provides for an international price-parity (IPP) formula for domestic urea manufacturers to calculate subsidy and the cost of production.
“The new IPP model announced for urea would make new investments feasible in this sector, which would reduce India’s dependence on imports,” CII said in a release on 10 August, adding that the move will benefit both the farming community and the fertiliser industry.
According to the policy guidelines, IPP for the revamp of existing units would be recognised at 85% in a price band of $250-425 a ton, while the same for expansion of capacity would be 90%.
“The new IPP policy would provide a level playing field that would encourage closed units to reopen and existing units to expand, as the pricing would be linked to price of imports,” the industry body said.
It also said that the policy will encourage plants based on coal gasification resulting in a better utilisation of low-grade Indian coal. It will not only reduce pollution but also increase the availability of fertilisers for the Indian farmer, CII said.