Chemicals & Fertilizers: the portfolio as a system

The Department of Chemicals and Petrochemicals makes policy for a sector that supplies inputs to agriculture, textiles, construction, packaging and pharmaceuticals. Its main instrument for industrial clustering is the Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) policy. Three regions have been approved: Dahej in Gujarat and Visakhapatnam–Kakinada in Andhra Pradesh (both February 2009), and Paradeep in Odisha (December 2010).

Skills and technical services are provided by the Central Institute of Petrochemicals Engineering and Technology (CIPET), renamed in 2020 to reflect a remit wider than plastics, and by the Institute of Pesticide Formulation Technology. The department’s public sector undertakings include Hindustan Organic Chemicals Ltd and HIL (India) Ltd. On 19 January 2025 the minister inaugurated CIPET projects in Ahmedabad.

Fertilizers reach farmers at prices set or supported by the Government. The difference between cost and farm-gate price is paid as subsidy to manufacturers and importers. There are two regimes:

• Urea has a statutorily notified maximum retail price of ₹242 per 45-kg bag, excluding neem-coating charges and taxes. PIB states that it has been unchanged since 1 March 2018.
• Phosphatic and potassic (P&K) fertilizers, such as DAP, come under the Nutrient Based Subsidy scheme, in force since 1 April 2010. It fixes a per-kilogram subsidy for each nutrient for 28 grades of fertilizer. The Union Cabinet approves NBS rates each season. On 8 April 2026 it approved Kharif 2026 rates with a provisional outlay of about ₹41,533.81 crore, against ₹37,216.15 crore for Kharif 2025.

In October 2022 the Government moved subsidised fertilizers to a single brand, “Bharat”, under the One Nation One Fertilizer initiative. At the same time retail outlets began converting into Pradhan Mantri Kisan Samriddhi Kendras, one-stop shops for farm inputs and advice. Official totals for these centres vary across releases, so no count is given here.

Newer products and incentives aim to use nutrients more efficiently. As of July 2025 there were seven Nano Urea plants, with capacity for 27.22 crore bottles a year, and three Nano DAP plants, with capacity for 7.64 crore bottles a year. Under PM-PRANAM, approved in June 2023, States that reduce their use of chemical fertilizers receive half of the subsidy saved.

The Department of Pharmaceuticals works on industry development, pricing and access. Drug prices are fixed and monitored by the National Pharmaceutical Pricing Authority under the Drugs (Prices Control) Order. Generic medicines are sold at lower prices through Jan Aushadhi Kendras, run by the Pharmaceuticals and Medical Devices Bureau of India. There were 16,912 kendras on 30 June 2025. A written reply in Parliament reported 20,149 on 30 June 2026, covering 776 of 784 districts, against a target of 25,000 by March 2027.

To reduce reliance on imported key starting materials and active ingredients, the Government runs Production Linked Incentive schemes:

• Bulk drugs (₹6,940 crore): capacity created for 26 key starting materials and active ingredients, with imports of about ₹1,807 crore avoided, as of September 2025.
• Pharmaceuticals (₹15,000 crore, 55 applicants): 191 products made in India for the first time, as of September 2025.

Three Bulk Drug Parks are under development, in Andhra Pradesh, Gujarat and Himachal Pradesh, with central assistance of ₹1,000 crore each. The PRIP scheme supports pharmaceutical research and innovation with an outlay of ₹5,000 crore. Seven NIPERs provide postgraduate pharmaceutical education and research.

Manufacturing quality is a health-ministry function. The revised Schedule M good manufacturing practice standards were notified under the drug rules on 28 December 2023. Smaller manufacturers were given a conditional extension to 31 December 2025.

According to PIB, six new urea units set up under the New Investment Policy 2012 added 76.2 lakh tonnes a year of capacity. Domestic urea capacity rose from 207.54 lakh tonnes a year in 2014–15 to 283.74 in 2023–24. Production reached 314.07 lakh tonnes in 2023–24 and 306.67 lakh tonnes in 2024–25. India continues to import urea to meet demand.

India imports a large share of its phosphatic and potassic fertilizers and their raw materials, so supply depends on international markets and shipping routes. In July 2025, during a visit to Saudi Arabia, long-term agreements were concluded with Ma’aden for the supply of 3.1 million tonnes of DAP a year for five years. On 5 July 2026 the Ministry issued a statement on fertilizer availability after shipping through the Strait of Hormuz was disrupted by events in West Asia.