"Although Fertilizer industry has made rapid progress; India's indigenous Fertilizer production is still not able to keep pace with the growth in consumption."Discuss
There are several reasons for this. Firstly, setting up a fertilizer plant in India is a long process which generally takes five to eight years from time of issue of letter of intent to start of production. There was an absence of clear policy of setting up fertilizer plant in the country.
Secondly, the government policy towards private sector players in fertilizers has never been clear. The business environment for fertilizer companies has been hostile due to urea subsidy and erratic supply of natural gas, which is raw material.
Further, India could not attract foreign companies to produce fertilizers here because they earn huge profits in exports to India. Thus, since local production is low, India is dependent on fertilizer imports.