Union Cabinet approved the National Investment Policy for Urea (NIPU)-2026

Union Cabinet approved the National Investment Policy for Urea (NIPU)-2026

¨     Union Cabinet approved the National Investment Policy for Urea (NIPU)-2026 on 15 July 2026.

¨  The policy covers domestic urea manufacturing, investment incentives, and capacity expansion in India's fertiliser sector.

¨     Urea is a nitrogenous fertiliser widely used in Indian agriculture.

¨     India's domestic urea production is about 30 million tonnes per year.

¨     The country's annual urea requirement is about 40 million tonnes.

¨     India imports around 10 million tonnes of urea annually to meet domestic demand.

¨     NIPU-2026 aims to add 10 million tonnes (1 crore metric tonnes) of new urea production capacity.

¨     The policy provides a framework for establishing 8–9 new natural gas-based urea manufacturing plants across the country.

¨     It offers assured returns on equity (RoE) in the range of 12% to 16%.

¨     The policy includes a transparent cost structure and measures to reduce foreign exchange (forex) risk.

¨     Under the policy, fixed costs will be converted into Indian rupees after four years.

¨     NIPU-2026 revises and extends the New Investment Policy (NIP), 2012.

¨     The New Investment Policy, 2012 expired in October 2019.

¨ The new policy is designed to encourage fresh investment in domestic urea manufacturing after the expiry of the previous framework.