India’s fertilizer sector has come a long way in strengthening the country’s agricultural and food security. Over the past decade, significant investments in domestic urea capacity have enhanced production and reduced import dependence. Yet, India remains the world’s largest importer of urea, while domestic urea production itself depends significantly on natural gas, a substantial part of which is imported as LNG. This highlights an important dimension of self-reliance: fertilizer security is closely linked to energy and raw-material security. In an increasingly uncertain global environment, the next phase of India’s fertilizer journey is therefore not merely about producing more, but about building a resilient, diversified and sustainable fertilizer value chain, supported by secure energy, technology and indigenous capabilities. The next challenge is not only to produce more urea, but to strengthen the security of the energy and raw-material chain behind that Urea production. HURL’s emerging Green Urea and Coal-to-Urea initiatives illustrate two complementary pathways: one based on Green Ammonia and CO2 captured from thermal power plant, the other on indigenous coal gasification.
India’s Urea Landscape
India has made significant progress in strengthening its domestic urea manufacturing capacity. Urea production rose from 22.5 million tonnes in 2014–15 to 30.6 million tonnes in 2024–25, with six new/revived plants adding 7.62 million tonnes of annual capacity. Today, the installed capacity is about
29.1 million tonnes. Despite this substantial expansion, 15–20% of India’s urea demand is still met through imports, keeping the country closely connected to global urea and energy markets. Yet the next phase of the challenge is becoming more complex: demand is rising, ageing capacity has to be replaced, and the raw materials and energy used by the sector remain exposed to global markets.
In FY 2025-26, urea demand was about 40 Million tonnes against domestic production of around 30 Million tonnes, resulting in a gap of about 10 Million tonnes.
The next question is not only: “How much urea can India produce?” It is also: “How secure are the raw materials used to produce it?”
Natural gas: the strategic vulnerability behind conventional urea
Natural gas is the principal feedstock for ammonia-based urea production. India’s Urea plants consume around 55 MMSCMD of natural gas, making fertilizer the country’s largest natural-gas-consuming sector. Around 85% of the natural gas used for domestic urea production is met through imported LNG, highlighting the close linkage between fertilizer production and global energy markets. As India seeks to strengthen its urea self-reliance, ensuring reliable, affordable and diversified sources of energy and feedstock becomes equally important.
The price shock: before and after the war
This dependence has also exposed the sector to significant price volatility. Average pooled gas prices for urea manufacturing have remained around US $12-14/MMBtu over the past 5-6 years, but have currently risen to around US $18/MMBtu, while EPMC gas prices have risen as high as US$23/MMBtu. Following the Russia–Ukraine conflict in 2022, the sharp rise in global gas prices pushed India’s pooled gas cost substantially increasing the cost of urea production and the associated subsidy burden. More recently, the 2026 conflict involving Iran and the disruption in the Strait of Hormuz again demonstrated the vulnerability of this linkage, with LNG supplies from the Gulf coming under pressure and international urea prices rising sharply. These episodes underline that fertilizer security is inseparable from energy security. The opportunity ahead, therefore, is to build a more secure foundation for domestic urea production through robust gas infrastructure, diversified supply arrangements and alternative feedstock pathways such as coal gasification, green hydrogen and green ammonia.
Government strategy: affordability, availability and transition
The Government of India has progressively strengthened urea self-reliance through a combination of capacity creation, policy support and diversification of production pathways. The New Investment Policy (NIP)–2012 enabled six new urea units, including HURL’s Gorakhpur, Sindri and Barauni plants, adding 7.62 Million tonnes per annum of capacity. The Government approved the National Investment Policy for Urea–2026 (NIPU-2026) in July 2026, with the objective of encouraging fresh investment in gas-based urea manufacturing and further strengthening domestic production.
At the same time, the Government is actively creating pathways beyond conventional natural-gas-based urea. The Department of Fertilizers has invited an EOI for Green Urea projects, envisaging the use of green ammonia and captured CO₂.
In parallel, the Ministry of Coal is promoting coal/lignite gasification for downstream products including urea, supported by a Rs 37,500 crore scheme; under the earlier coal-gasification initiative, three new urea projects have also been approved based on coal gasification.
On the green-ammonia side, SECI's SIGHT programme has created long-term demand from the fertilizer sector. The competitive bidding resulted in green-ammonia prices ranging from Rs 49.75 to Rs 64.74 per kg, with the lowest price of Rs 49.75 per kg - a significant milestone in demonstrating the emerging commercial viability of green ammonia in India.
HURL: Leading the Next Frontier
Building on its experience in developing and operating large-scale urea plants, Hindustan Urvarak & Rasayan Limited (HURL) is taking forward the next phase of fertilizer self-reliance through two distinct technology pathways. HURL is pursuing Green Urea production using Green Ammonia and captured CO₂ at its Barauni Unit, while simultaneously developing Urea production through Coal Gasification at its Sindri Unit. Together, these initiatives represent HURL’s endeavour to move beyond conventional natural-gas-based urea production and explore pathways that can strengthen feedstock security, reduce external dependencies and support more sustainable fertilizer production.
HURL Barauni: turning green hydrogen and captured CO₂ into Urea
At its Barauni Unit in Bihar, HURL is exploring a Green Urea pathway enabled by the proximity of its fertilizer complex to NTPC’s Barauni power facility. Following the Expression of Interest issued by the Department of Fertilizers on 22 June 2026 for domestic production of Green Urea, HURL has developed a concept for strategic integration of Green Ammonia and captured CO₂ from NTPC for urea production. To take this concept forward, HURL has signed an MoU with NTPC, providing a framework for collaboration between the two organisations.
The conceptual chain is straightforward yet potentially transformative:
Renewable Power → Green Hydrogen → Green Ammonia + Captured CO₂ → Green Urea
The approach brings together two otherwise separate industrial agendas—clean energy and carbon utilisation with fertilizer production. Importantly, it views CO₂ not merely as an emission to be managed, but as a carbon feedstock that can be captured and utilised in urea production. By integrating renewable-energy-based green ammonia with captured CO₂ and an existing fertilizer ecosystem, HURL is exploring a pathway that could reduce dependence on conventional fossil-based feedstocks while creating a lower-carbon route for urea production.
HURL Sindri: indigenous coal as an alternative feedstock
HURL is exploring a Coal-to-Urea pathway based on coal gasification, in collaboration with Coal India Limited (CIL) at its Sindri Unit. HURL has signed an MoU with CIL to jointly explore the project, bringing together HURL’s expertise in fertilizer production and CIL’s capabilities and resources in the coal sector. The initiative is aligned with the Government of India’s strategic push to promote coal gasification as a means of reducing dependence on imported natural gas and enabling greater use of indigenous resources for the production of chemicals and fertilizers.
The conceptual chain is:
Indigenous Coal → Gasification → Syngas → Ammonia → Urea.
The pathway is not simply about replacing one fuel with another. Its strategic significance lies in creating an additional domestic feedstock route for urea, a product central to India’s food security. By combining HURL’s fertilizer expertise with CIL’s domestic coal resources, the initiative seeks to convert an indigenous resource into an essential agricultural input while reducing exposure to imported natural gas and global energy-market volatility. In this sense, the Sindri initiative represents another important dimension of the next frontier of fertilizer self-reliance.
The HURL opportunity: from about 3.8 Million Tonnes to a potential 7.62 Million Tonnes footprint
HURL’s three existing plants together have a urea capacity, equivalent to about 3.8 Million Tonnes per annum. HURL is examining additional strategic pathways in Green Urea at Barauni and Coal-to-Urea at Sindri, each envisaged in the present planning material at approximately 1.27 Million Tonnes per annum. Additionally, HURL is also envisaging a gas based plant at its Gorakhpur Unit.
This is a potential future footprint. If these projects are successfully developed and commissioned, HURL would have a production platform with a potential additional capacity of about 2.54 Million Tonnes through alternative raw-material pathways. With this, HURL shall become the largest urea manufacturer in India, with an annual production capacity of 7.62 Million Tonnes.
A new definition of fertiliser self-reliance
The central strategic proposition is simple: a tonne of urea manufactured in India strengthens product self-reliance; a tonne manufactured using secure indigenous resources strengthens both product and feedstock self-reliance. Green hydrogen can reduce dependence on fossil-fuel-derived hydrogen in ammonia production, while captured CO₂ can provide the carbon component required for urea synthesis. Coal gasification, meanwhile, can convert an indigenous carbon resource into syngas for downstream ammonia and urea production. These are different technological pathways, but they point towards the same objective—greater control over the raw-material chain that underpins urea production.
This does not mean that natural gas will cease to be important. Gas-based plants will remain a major part of India’s fertilizer architecture. The strategic opportunity is to create a diversified production portfolio, in which natural gas, coal gasification and green hydrogen each have a defined role based on economics, technology maturity, resource availability and environmental performance. India has already demonstrated its ability to build large-scale urea manufacturing capacity. The next chapter is about deepening the meaning of self-reliance.
From ‘Made in India’ to ‘Made in India From India’s Resources’
Fertilizer self-reliance can therefore be viewed through three interconnected layers: product self-reliance, energy self-reliance and raw-material self-reliance. India’s existing urea plants contribute to the first. Diversified and secure gas sourcing strengthens the second. The emerging Green Urea and Coal-to-Urea pathways explore the third by seeking to anchor critical feedstocks more firmly within India’s own resource and energy ecosystem.
For India, this is ultimately not only an industrial question. Fertilizer security is an essential component of food security, and the resilience of the fertilizer sector depends on the resilience of the energy and raw-material systems that support it. The next chapter of India’s fertilizer story is therefore not simply about producing more urea. It is about producing urea more securely, more sustainably and increasingly from India’s own resources.
Conclusion
India’s fertilizer journey is entering a new chapter, and HURL is positioning itself at the forefront of this transformation. From establishing large-scale urea capacity to exploring green urea and coal-to-urea technologies, HURL is evolving with the changing requirements of India’s fertilizer sector. Its initiatives at Barauni and Sindri bring together renewable energy, green hydrogen, carbon utilisation and indigenous resources, translating the idea of self-reliance into new production pathways. These efforts also align with India’s broader national objectives of strengthening self-reliance, advancing a low-carbon economy and achieving net-zero emissions by 2070. The next frontier is therefore not simply about how much urea India produces, but how securely, sustainably and increasingly from its own resources it can produce it. HURL, with the support of its primary promoter companies—NTPC, IOCL and Coal India—is taking the lead in turning this vision into reality while contributing to the larger national journey towards a more resilient, resource-efficient and low-carbon fertilizer sector.
(Dr. Siba Prasad Mohanty is Managing Director, Hindustan Urvarak & Rasayan Limited)