National Investment Policy for Urea-2026 (NIPU-2026) Background: The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has approved the National Investment Policy for Urea-2026 (NIPU-2026) under the 'Atmanirbhar Bharat' (Self-Reliant India) initiative. About NIPU-2026 NIPU-2026 is a new investment policy for the fertilizer sector. It aims to facilitate the revamping of old urea plants, the expansion of existing units, and the establishment of new natural gas-based urea factories in India. It replaces the 'New Investment Policy (NIP)-2012'; the investment period for NIP-2012 ended in October 2019. Objectives To increase India's domestic urea production. To add 10 million tonnes of new urea production capacity. To support the establishment of 8 to 9 modern natural gas-based urea plants. To reduce dependence on imported urea and promote the 'Atmanirbhar Bharat' (self-reliance) policy. Key Features Production Capacity Expansion The policy is designed to generate an additional 10 million tonnes of urea production. Approximately 8 to 9 new natural gas-based fertilizer plants will be set up. Separation of Fixed and Variable Costs Fixed costs and variable costs will be clearly distinguished in government subsidy calculations. This enhances transparency while reducing administrative delays and confusion. Assured Return on Equity (RoE) Investors will be provided with an assured Return on Equity (RoE). Minimum RoE: 12% Maximum RoE: 16% This instills confidence in companies and encourages investment. Protection against foreign exchange risk Companies will be protected against fluctuations in foreign exchange rates. After a certain period, fixed costs can be fully converted into Indian Rupees (INR) based on the prevailing exchange rate. Savings per plant Compared to the earlier NIP-2012 policy, the new policy is expected to yield savings of over ₹250 crore per plant. This is made possible through better cost management and greater transparency. Single-window approval system The policy provides a 'single-window' system…
