New Delhi: India is ramping up efforts to tackle the long-standing problem of producing technical urea (TGU) and plans to rope in Gujarat State Fertilizers and Chemicals (GSFC) to produce the key component used in diesel engine exhaust fluid (Adblue), which is critical to the production of diesel vehicles, two people with knowledge of the development told Mint.
India has the capacity to produce 1.5 lakh tonnes of solid mix per year, against the automotive industry’s requirement of 6 lakh tonnes, with the difference being covered by imports from the Persian Gulf. But as the war in West Asia continues to disrupt supply chains, the Center is now considering boosting domestic production, the people cited above said, requesting anonymity.
Urea used in agriculture and technical urea are chemically the same compounds. However, technical urea is a highly purified form with a wide range of industrial applications, including adhesives and the production of dyes, pigments and cosmetics.
“We are now thinking of preparing for future supply cuts as well so that TGU is less dependent on imports,” said the first of the two people cited above, adding that GSFC is being considered for the plan.
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In the weeks after the outbreak of war in West Asia, discussions began between chemical and fertilizer ministries and heavy industry about TGU supplies to diesel vehicle manufacturers after the industry lobby group Society of Indian Automobile Manufacturers (Siam) sought to increase TGU production from Gujarat Narmada Valley Fertilizers and Chemicals (GNFC), which automakers say is the sole producer of Adblue urea, used in April15 production.
“While automakers source TGU from GNFC, its parent company GSFC also has some capacity to produce the blend, which is why it is being considered as an additional source,” the second person said.
Capacity developed
GSFC, which owns a 19.80% stake in GNFC, has also developed a capacity of 35 metric tons per day to produce TGU, starting in 2020. However, this capacity is only available when one of its melamine plants is shut down for several weeks each year, according to the company’s website.
Queries emailed to spokespersons of the ministries of chemicals and fertilizers, heavy industries, GSFC, GNFC, Siam, diesel vehicle makers Tata Motors, Mahindra & Mahindra and Ashok Leyland remained unanswered.
Increasing TGU’s local manufacturing capacity would help the automotive sector reduce its dependence on imports. “It will be easier to procure TGU locally for car companies, but the quality of the mixture that is supplied from the new plants needs to be checked,” said IV Rao, senior fellow in the Department of Transport and Urban Management at The Energy and Resources Institute (Teri).
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This development assumes importance for India, the world’s second largest consumer of fertilizers and the world’s largest importer of urea. has ₹1.77 trillion as budgeted fertilizer subsidy bill, most of which continues to go towards urea.
Saudi Arabia, the United Arab Emirates (UAE) and Qatar together account for a third of India’s urea imports, but war in the region has disrupted supplies.
Urea, which accounts for about 55% of India’s total fertilizer consumption by volume, has an import dependency of about 15%.
The fertilizer requirement for the 2025 kharif season (June to October) was 18.5 million tonnes of urea. As of May 11, urea availability stood at 7.66 million tonnes as against 7.54 million tonnes in the same period last year, according to government data.
Competitive demand
According to Sachchid Nand, a visiting professor at the Indian Council for Research on International Economic Relations (ICRIER), urea has a competitive demand in India. “There are several balls that you have to keep in the air at the same time because no industry should suffer from a shortage,” he said, adding that the gap between domestic urea production and demand was about 10 million tonnes every year.
Because of the high demand for urea in fertilizers and consequently India’s massive agricultural sector, which employs about 40-50% of India’s workforce, the diversion of any urea to other industries should be limited and carefully carved out, he said.
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“We expected the conflict situation to improve, but it didn’t. It has developed into a serious problem,” said Nand, who also previously worked with industry lobby group Fertilizer Association of India.
Some other experts said that diverting demand for urea is a crucial balancing act. “The government’s move to double the production of technical urea (TGU) is seen as a calibrated and informed balancing act aimed at supporting industrial demand while ensuring adequate availability of fertilizers for the agriculture sector,” said Nutan Kaushik, CEO of the Amity Food and Agriculture Foundation, a think tank.
The farmers’ unions were of the opinion that agriculture should not suffer as a result of industry producing more TGU. “While urea has wide applications in various sectors, the government’s priority should remain to ensure continuous availability of the fertilizer for agricultural use during the ongoing kharif season,” said Ranbir Singh, a sugarcane farmer and president of the Saharanpur-based farmers’ group Kisan Nyay Morcha.
