Fertilizer Projects -Policy Environment

Policy Environment

No license is required for setting up a new fertilizer project or for expansion of capacity of existing fertilizer plants. Investments/projects in the fertilizer sector can be undertaken after filing the industrial Entrepreneur's Memorandum with the secretariat for Industrial Assistance(SIA) as per Industrial policy resolution of the Government dated 24th July, 1991.
A prior clearance of the project site from environmental angle is, however, a statuary requirement.
Any major public/cooperative Sector project for setting up new plants or for revamp/retrofit/expansion of existing plants are subject to investment approval of the Government through the Public investment Board etc., depending on the investment involved and the delegated financial powers available to each company.

Concessions/incentives on import of capital goods for fertilizer industry:

To encourage investment in the fertilizer sector, the following concessions are available to the domestic industry:

• Concessional customs duty on import of capital goods for setting up of new plants/substantial expansion /renovation/modernization of existing plants.
• Deemed export benefit to indigenous suppliers of capital goods for new/revamp/retrofit/modernization projects of fertilizers projects of fertilizers provided such supplies are made under the procedure of International Competitive Bidding.

Strategy for growth:

The fertilizer industry has adopted the following strategy to increase fertilizer production:

• Expansion/retrofitting/revamping of existing fertilizer plants:
• Setting up joint venture projects in countries having abundant and cheaper raw material resources.