Latest news with #ofPotash
News18
29-07-2025
- Business
- News18
Adequate availability of fertilisers in Maharashtra this Kharif season: Govt
New Delhi, Jul 29 (PTI) There is 'adequate" availability of fertilisers in Maharashtra during the ongoing Kharif 2025 season, Parliament was informed on Tuesday. Additionally, the state has maintained a buffer stock of 76,000 tonnes of urea and 13,000 tonnes of DAP (Di Ammonium Phosphate), Minister of State for Chemicals and Fertilisers Anupriya Patel said in a written reply to the Rajya Sabha. As per the data, Maharashtra's fertiliser supply position for Kharif 2025, as of July 24, demonstrates robust coverage of seasonal requirements across all major product categories. For urea, the state required 15.52 lakh metric tonnes (LMT) of the fertiliser for the Kharif season. Up to July 24, the pro rata requirement stood at 9.59 LMT, while availability was significantly higher at 14.12 LMT. Sales during the period were 10.36 LMT with a closing stock of 3.76 LMT, indicating not only strong supply but also a healthy buffer to meet any further surges in demand. In the case of DAP, Maharashtra's total seasonal requirement was 4.60 LMT, with a pro rata requirement till July 24 of 2.94 LMT. Availability by this cutoff was 3.02 LMT, just above the requirement, while sales were at 1.92 LMT. The resulting closing stock was 1.10 LMT, which, despite slower sales relative to pro rata needs, provides a comfortable supply position and ensures that immediate shortages are unlikely. MOP (Muriate of Potash) showed an even stronger surplus position. Against a seasonal target of 1.20 LMT and a pro rata requirement of just 0.63 LMT, Maharashtra had made available 1.87 LMT. Sales reached 1.04 LMT – well ahead of the expected drawdown – leaving a closing stock of 0.84 LMT. This significant buffer demonstrates prudent procurement and distribution that can easily accommodate any rise in crop nutrient demand mid-season. For NPKS (complex fertilisers), the scenario was also notably positive. The requirement for the season was 18.00 LMT, with the pro rata till July 24 being 10.59 LMT. With 20.55 LMT made available and sales touching 12.76 LMT, closing stock stood high at 7.70 LMT. Both availability and utilisation figures are much higher than the benchmark for the period, reflecting proactive management and smooth supply chain functioning for this essential category, the data showed. The government monitors the movement of all major subsidised fertilisers across the country through an online web-based monitoring system called Integrated Fertilizer Monitoring System (iFMS). PTI LUX LUX SHW view comments First Published: Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
Economic Times
18-07-2025
- Business
- Economic Times
Dependent on China, drowning in red tape: How a broken policy regime is killing India's small fertiliser manufacturers
iStock India imports roughly 20% of urea, 50-60% of DAP, 80% of specialty fertiliser, and 100% of MOP. Small is beautiful—but not always. Take the micro, small, and medium-sized enterprises (MSMEs) in India's fertiliser industry, for instance—more specifically, the smaller units engaged in the manufacturing of specialty fertilisers. Many of them are even on the verge of collapse as they grapple with mounting pressure from rising imports, regulatory burden, and high input costs. India, an agricultural-dependent economy, relies significantly on imports to fulfil its fertiliser needs, even though domestic production has increased to 503.35 lakh tonnes in 2023-24 from 425.95 lakh tonnes in 2019-20. And its top suppliers are China, Russia, Saudi Arabia, Oman, and the US. According to industry sources, the country imports roughly 20% of urea, 50-60% of DAP (Di-ammonium Phosphate), 80% of specialty fertiliser, and 100% of MOP (Muriate of Potash). Additionally, it also imports other fertilisers like NPK compounds and raw materials like phosphate rock and sulphur for DAP production. Recently, China, which accounts for nearly 80% of India's specialty fertiliser imports, imposed restrictions on exports. It has also suspended export permits for DAP since mid-2023. For India, this is a chance to augment its domestic capacity and become self-reliant in fertiliser. While the disruption in imports has highlighted the vulnerabilities in the supply chain, the 'ongoing preference for imports' in policy frameworks, as per local manufacturers, has impeded the growth of India's domestic specialty fertiliser players. According to them, subsidies and preferential trade rules for imported fertilisers have created an uneven playing field. According to industry estimates, India imported 150,000-160,000 tonnes of specialty fertilisers during the June-December 2024 period, with China supplying 70-80%. Although specialty fertilisers represent a small percentage of overall demand, their popularity is rapidly increasing, as they offer customised nutrient delivery that caters to specific crops, soil types, and growth stages. They improve crop yields and quality while minimising ecological impact by increasing nutrient use efficiency and reducing nutrient losses to the environment. Rajib Chakraborty, President, Soluble Fertilizer Industry Association (SFIA), says, 'The specialty fertilisers, particularly water-soluble fertilizers (WSFs), began to make inroads into the Indian market in the late 1990s. The real momentum in adoption and commercialisation of WSFs came in the early 2000s, when states like Maharashtra emerged as early adopters. And its adoption has increased by 20-30% over the years.' Specialty fertilisers include water-soluble fertilisers (WSFs), liquid fertilisers, micronutrient fertilisers, nano fertilisers, bio-stimulants, and organic formulations. While the big players in the country are focused on the production of major fertilisers like urea, DAP, MOP, and NPK, the specialty fertiliser segment is primarily led by MSMEs. While demand, especially for specialty fertilisers, is rapidly rising, the growth of India's domestic fertiliser production has been sluggish. Experts and industry stakeholders assert, among other things, that policies favouring imports have put local manufacturers at a disadvantage. 'No licenses are required for foreign suppliers,' as per the current regulations. 'An importer can simply submit a scanned letter to add the source, which allows them to sell across all operational states without facing the additional regulatory burdens of the Fertiliser Control Order (FCO),' says Rajib Chakraborty of SFIA; in contrast, an Indian manufacturer must navigate complex regulatory requirements, which include obtaining multiple licenses, maintaining offices, and setting up warehouses in each state where fertiliser is Rules, Small PlayersFor MSMEs, these are huge asks and not sustainable. Even though large manufacturers are subject to the same regulatory framework as smaller ones, their experience often differs due to scale advantages, according to Suhash Buddhe, Vice President, Vidarbha Industries Association. They can 'more easily navigate and comply with regulations due to their size and resources,' he says. MSMEs voice their grievances about the stringent FCO rules. They believe that their small size, which usually means selling goods worth around Rs 1 crore in a state, limits their operational flexibility. On the other hand, large companies with sales of Rs 100-200 crore can use warehouses to directly import and store consignments, thus bypassing certain regulatory hurdles that smaller units struggle with. Buddhe says, 'Many prefer imports over 'Made in India' products, not because of quality or price but due to complex regulatory hurdles and the inability of Indian SMEs to maintain licenses across multiple states. Even public sector undertakings (PSUs) are no exception.'ET Digital reviewed a PSU's tender for soluble fertilisers, which stipulated bidders (manufacturers/traders) to have an authorisation certificate for selling products in the applied state(s). The tender document specifies this condition. 'Similar cases have been observed in Government e-Marketplace (GeM) and direct tender invitations. Many PSUs are not floating the tenders through GeM, which promotes locally manufactured products. They are floating open tenders,' says Chakraborty. A senior official from the agriculture department states that the government is actively working to promote ease of doing business nationwide. Since fertiliser is a concurrent subject, many states have streamlined their systems, with ongoing efforts to further enhance the process, he notes. Meanwhile, Devesh Chaturvedi, Secretary, Agriculture & Farmers Welfare, says, 'There is always a scope for improvement.' Former Union Minister Suresh Prabhu acknowledges the difficulties faced by small fertiliser companies, especially in terms of compliance. 'Fertiliser companies face numerous issues, many of which are legitimate and require immediate attention,' says Prabhu. ET Digital attempted to contact officials in the concerned department through email and phone calls for this report; however, no response was received by the time the story was published. State officials overseeing fertiliser and agriculture departments declined to comment when contacted by phone. Some officials acknowledged the issue of over-regulation impacting SMEs but refused to provide further details. Although there has been no official response on this matter, experts and stakeholders point to structural issues in the regulatory framework. 'Regulatory framework is outdated' The FCO was enacted under the Essential Commodities Act, 1955, to regulate the quality of fertilisers and their distribution, particularly to facilitate the effective delivery of government subsidies and promote domestic production. Since then, the FCO, which is jointly administered by central and state authorities, has undergone several amendments. However, it has struggled to keep pace with the changing requirements of India's domestic agriculture, according to experts. They say the framework is outdated today, reflecting remnants of the 'Inspector Raj' and 'License Raj' Kedia, Banking Committee Chairman and former President of the Federation of Indian Micro and Small & Medium Enterprises (FISME), notes that fertilisers today are vastly different from those in 1985. 'The fertiliser list initially included basic nutrients like nitrogen, phosphorus, and potassium (NPK), primarily urea and DAP. Over time, it has expanded to include secondary nutrients like magnesium and calcium, along with micronutrients such as zinc and boron, making the regulatory framework more complex and wide-ranging,' he explains. With over 100 fertilisers currently listed under the FCO, along with countless mixtures of macro- and micro-nutrients, the current framework seems overly complex, says Kedia. 'Given the varying conditions across large states like Rajasthan or diverse regions like Andhra Pradesh, a label claim system could be more practical, he suggests. This, he argues, will empower industry while enabling 'consumers to make informed decisions based on specific nutrient requirements.' According to FCO rules, an SME involved in fertiliser needs to register separately in each state where it wants to operate. 'A few years ago, an initiative was launched to create a common portal for fertiliser manufacturers to register and operate nationwide. However, the effort reportedly didn't succeed, and the project ultimately fizzled out,' notes Kedia. Experts and stakeholders point out that the FCO bestows considerable authority upon individual inspectors, enabling them to suspend or shut down operations at their discretion. Experts point out that since fertiliser falls under the Essential Commodities Act, various departments may oversee it, depending on the state. 'In some cases, a single manufacturing unit may face oversight from as many as 32 inspectors, with the actual number on the ground often exceeding official records,' says Buddhe. From central government officials, such as the Deputy Director of Agriculture, Central Insecticide Inspector, Central Fertiliser Inspector, and Plant Protection Officer, to state government officials, such as the Chief Quality Control Officer, Chief Inspector (Seed), Deputy Director (Fertiliser), Technical Officer (Fertiliser), and Technical Officer (Insecticide), oversee the operations of fertiliser units. At the grassroots level, the Taluka Agriculture Officer adds yet another level of scrutiny. Additionally, flying squads from the Department of Agriculture conduct sudden inspections, he notes. 'This (several levels of inspection) fragments operations and increases compliance costs by 30-40% for MSMEs. Small manufacturers spend Rs 3-5 crore annually on compliance, equivalent to 20% of their R&D budgets, making innovation unsustainable,' adds Buddhe. A Punjab-based fertiliser SME's promoter admitted that his company incurred huge expenses to obtain licenses, maintain quality control systems, and meet the specific packaging and labelling requirements of FCO. 'We have experienced a significant surge in costs over the years, and increasing input costs have further exacerbated the situation,' he says. 'The plethora of complex and uncertain rules and regulations is creating a challenging environment for small fertiliser manufacturers in the country,' says another SME based out of Uttar Pradesh. Suresh Prabhu states that in 1999, during his tenure as the Minister for Fertilizers, a new policy was launched to address the industry's issues arising from excessive regulations, with the ultimate goal of phasing out the ministry itself. 'With the advancements in logistics and digital technologies enabling timely compliance, I believe it's time to revisit and update the fertiliser policy that was drafted in 1999. A new policy is overdue,' Prabhu says. However, regulation isn't the only challenge for fertiliser MSMEs in the country; they also deal with a skewed subsidy structure that favours larger companies, says Kedia. 'The current subsidy structure favours large manufacturers, giving them an uneven advantage. They receive subsidies on products with added micronutrients like zinc and boron. However, smaller players selling standalone micronutrient products don't get similar subsidies, putting them at a disadvantage.' After overcoming these initial hurdles, fertiliser MSMEs confront further challenges related to quality control for their smooth operations. Quality control The 2011 paper 'Fertilizer Quality Control in India: The need for a systemic change' by Sumita Kale and Laveesh Bhandari, published by FISME, stands out as one of the very few comprehensive studies on this topic. It highlights excessively strict tolerance limits and inadequate testing methods, especially for micronutrient fertilisers, as pressing concerns. The paper indicates that there are limited testing labs, which are poorly equipped and understaffed; additionally, it notes that sampling procedures are defective, all of which together undermine the accuracy and credibility of problems remain unresolved to this day, according to experts and stakeholders. The Central Fertiliser Quality Control & Training Institute (CFQCTI), Faridabad, has 'no information' on registered fertiliser dealers across the country, as per the RTI response received by ET Digital. Additionally, there was no definite number provided for fertiliser samples analysed and found non-standard in the last five years. Experts say that, despite increased capacity, testing labs are still unable to manage the minimum required samples, indicating a shortage of full-time inspectors. To maintain testing standards, the central government, however, established the National Accreditation Board for Testing and Calibration Laboratories (NABL), which accredits testing labs. Under the FCO, only 'approved' labs can conduct tests. Chakraborty highlights that most state laboratories fail to meet testing standards, with less than 5% being NABL-accredited. He recommends setting a strict deadline for NABL accreditation, requiring states to comply within a set timeframe, and not using non-NABL lab reports for criminal action against SMEs. 'We have increased the sanction of money to states for NABL accreditation of laboratories. We are actively addressing these issues,' says Agriculture Secretary Chaturvedi. Currently, there are 84 operational Fertilizer Quality Control Laboratories in India, including the four set up by the Central Government—the Central Fertilizer Quality Control & Training Institute, Faridabad, and its three associated regional laboratories. 'One nation, one license' To streamline operations of fertiliser units, Rahul Mirchandani, President of the Indian Micro-Fertilizer Manufacturers Association (IMMA), suggests a single licence for the entire country. 'With 'one nation, one license,' the FCO regulations should align with tax regulations, allowing businesses to bill and operate nationwide without state-specific constraints. This would eliminate the need for redundant licenses and reduce overhead costs,' says Aries Agro's, Chairman, believe key reforms are necessary to reduce import dependency, including limiting inspectors' powers and removing non-subsidised fertilisers from the Essential Commodities Act. They argue that stringent regulations, where minor lab errors can lead to jail time, create excessive fear among manufacturers and importers. Associations also demand a centralised portal for fertiliser. 'A centralised, pan-India licensing framework with a single-window digital compliance portal can reduce friction for manufacturers. Importers should also align with similar documentation and regulatory standards to ensure a level playing field. Additionally, creating a dedicated Department of Fertiliser and Agriculture Department liaison cell and encouraging PSUs to allocate a percentage of tender volumes to Indian small-scale manufacturers,' says Abhishek Wadekar, Founder & Chairman, Tradelink senior government official agreed that a central portal for fertiliser manufacturers to register and operate across the country would be beneficial. To promote local fertiliser production, stakeholders are calling for clearer clause definitions and less regulation. They suggest distinguishing between 'spurious' (intentional adulteration) and 'deficient' (unintentional nutrient deficiency). Currently, even a 0.1% deviation beyond tolerance limits can lead to spurious labelling and criminal prosecution. Standardising documentation across states is also a priority for them. Wadekar proposes addressing this gap through measures like harmonised compliance, centralised registration, and support mechanisms. Nishant Kanodia, Chairman, Matix Fertilisers and Chemicals, suggests adopting a risk-based, digital-first compliance model from other sectors could be beneficial since it would focus inspections on high-risk areas and simplify procedures for manufacturers with a good compliance track record.
Time of India
18-07-2025
- Business
- Time of India
Dependent on China, drowning in red tape: How a broken policy regime is killing India's small fertiliser manufacturers
Small is beautiful—but not always. Take the micro, small, and medium-sized enterprises (MSMEs) in India's fertiliser industry, for instance—more specifically, the smaller units engaged in the manufacturing of specialty fertilisers . Many of them are even on the verge of collapse as they grapple with mounting pressure from rising imports, regulatory burden, and high input costs. India, an agricultural-dependent economy, relies significantly on imports to fulfil its fertiliser needs, even though domestic production has increased to 503.35 lakh tonnes in 2023-24 from 425.95 lakh tonnes in 2019-20. And its top suppliers are China, Russia, Saudi Arabia, Oman, and the US. According to industry sources, the country imports roughly 20% of urea , 50-60% of DAP (Di-ammonium Phosphate), 80% of specialty fertiliser , and 100% of MOP (Muriate of Potash). Additionally, it also imports other fertilisers like NPK compounds and raw materials like phosphate rock and sulphur for DAP production. Explore courses from Top Institutes in Select a Course Category Digital Marketing CXO Design Thinking Technology Data Analytics MCA Data Science PGDM Others Degree Finance Artificial Intelligence Cybersecurity Data Science healthcare others Management Project Management Public Policy Product Management Healthcare Operations Management Leadership MBA Skills you'll gain: Digital Marketing Strategies Customer Journey Mapping Paid Advertising Campaign Management Emerging Technologies in Digital Marketing Duration: 12 Weeks Indian School of Business Digital Marketing and Analytics Starts on May 14, 2024 Get Details Skills you'll gain: Digital Marketing Strategy Search Engine Optimization (SEO) & Content Marketing Social Media Marketing & Advertising Data Analytics & Measurement Duration: 24 Weeks Indian School of Business Professional Certificate Programme in Digital Marketing Starts on Jun 26, 2024 Get Details Recently, China, which accounts for nearly 80% of India's specialty fertiliser imports, imposed restrictions on exports. It has also suspended export permits for DAP since mid-2023. For India, this is a chance to augment its domestic capacity and become self-reliant in fertiliser. While the disruption in imports has highlighted the vulnerabilities in the supply chain, the 'ongoing preference for imports' in policy frameworks, as per local manufacturers, has impeded the growth of India's domestic specialty fertiliser players. According to them, subsidies and preferential trade rules for imported fertilisers have created an uneven playing field. According to industry estimates, India imported 150,000-160,000 tonnes of specialty fertilisers during the June-December 2024 period, with China supplying 70-80%. Although specialty fertilisers represent a small percentage of overall demand, their popularity is rapidly increasing, as they offer customised nutrient delivery that caters to specific crops, soil types, and growth stages. They improve crop yields and quality while minimising ecological impact by increasing nutrient use efficiency and reducing nutrient losses to the environment. Live Events iStock Specialty fertilisers include water-soluble fertilisers (WSFs), liquid fertilisers, micronutrient fertilisers, nano fertilisers, bio-stimulants, and organic formulations. Rajib Chakraborty, President, Soluble Fertilizer Industry Association (SFIA), says, 'The specialty fertilisers, particularly water-soluble fertilizers (WSFs), began to make inroads into the Indian market in the late 1990s. The real momentum in adoption and commercialisation of WSFs came in the early 2000s, when states like Maharashtra emerged as early adopters. And its adoption has increased by 20-30% over the years.' Specialty fertilisers include water-soluble fertilisers (WSFs), liquid fertilisers, micronutrient fertilisers, nano fertilisers, bio-stimulants, and organic formulations. While the big players in the country are focused on the production of major fertilisers like urea, DAP, MOP, and NPK, the specialty fertiliser segment is primarily led by MSMEs. While demand, especially for specialty fertilisers, is rapidly rising, the growth of India's domestic fertiliser production has been sluggish. Experts and industry stakeholders assert, among other things, that policies favouring imports have put local manufacturers at a disadvantage. 'No licenses are required for foreign suppliers,' as per the current regulations. 'An importer can simply submit a scanned letter to add the source, which allows them to sell across all operational states without facing the additional regulatory burdens of the Fertiliser Control Order (FCO),' says Rajib Chakraborty of SFIA; in contrast, an Indian manufacturer must navigate complex regulatory requirements, which include obtaining multiple licenses, maintaining offices, and setting up warehouses in each state where fertiliser is distributed. Source: Ministry of Fertilisers (Annual Report 2023-24) Big Rules, Small Players For MSMEs, these are huge asks and not sustainable. Even though large manufacturers are subject to the same regulatory framework as smaller ones, their experience often differs due to scale advantages, according to Suhash Buddhe, Vice President, Vidarbha Industries Association. They can 'more easily navigate and comply with regulations due to their size and resources,' he says. MSMEs voice their grievances about the stringent FCO rules. They believe that their small size, which usually means selling goods worth around Rs 1 crore in a state, limits their operational flexibility. On the other hand, large companies with sales of Rs 100-200 crore can use warehouses to directly import and store consignments, thus bypassing certain regulatory hurdles that smaller units struggle with. Buddhe says, 'Many prefer imports over 'Made in India' products, not because of quality or price but due to complex regulatory hurdles and the inability of Indian SMEs to maintain licenses across multiple states. Even public sector undertakings (PSUs) are no exception.' iStock The FCO was enacted under the Essential Commodities Act, 1955, to regulate the quality of fertilisers and their distribution. ET Digital reviewed a PSU's tender for soluble fertilisers, which stipulated bidders (manufacturers/traders) to have an authorisation certificate for selling products in the applied state(s). The tender document specifies this condition. 'Similar cases have been observed in Government e-Marketplace (GeM) and direct tender invitations. Many PSUs are not floating the tenders through GeM, which promotes locally manufactured products. They are floating open tenders,' says Chakraborty. A senior official from the agriculture department states that the government is actively working to promote ease of doing business nationwide. Since fertiliser is a concurrent subject, many states have streamlined their systems, with ongoing efforts to further enhance the process, he notes. Meanwhile, Devesh Chaturvedi, Secretary, Agriculture & Farmers Welfare, says, 'There is always a scope for improvement.' Former Union Minister Suresh Prabhu acknowledges the difficulties faced by small fertiliser companies, especially in terms of compliance. 'Fertiliser companies face numerous issues, many of which are legitimate and require immediate attention,' says Prabhu. ET Digital attempted to contact officials in the concerned department through email and phone calls for this report; however, no response was received by the time the story was published. State officials overseeing fertiliser and agriculture departments declined to comment when contacted by phone. Some officials acknowledged the issue of over-regulation impacting SMEs but refused to provide further details. Although there has been no official response on this matter, experts and stakeholders point to structural issues in the regulatory framework. 'Regulatory framework is outdated' The FCO was enacted under the Essential Commodities Act, 1955, to regulate the quality of fertilisers and their distribution, particularly to facilitate the effective delivery of government subsidies and promote domestic production. Since then, the FCO, which is jointly administered by central and state authorities, has undergone several amendments. However, it has struggled to keep pace with the changing requirements of India's domestic agriculture, according to experts. They say the framework is outdated today, reflecting remnants of the 'Inspector Raj' and 'License Raj' era. Neeraj Kedia, Banking Committee Chairman and former President of the Federation of Indian Micro and Small & Medium Enterprises (FISME), notes that fertilisers today are vastly different from those in 1985. 'The fertiliser list initially included basic nutrients like nitrogen, phosphorus, and potassium (NPK), primarily urea and DAP. Over time, it has expanded to include secondary nutrients like magnesium and calcium, along with micronutrients such as zinc and boron, making the regulatory framework more complex and wide-ranging,' he explains. With over 100 fertilisers currently listed under the FCO, along with countless mixtures of macro- and micro-nutrients, the current framework seems overly complex, says Kedia. 'Given the varying conditions across large states like Rajasthan or diverse regions like Andhra Pradesh, a label claim system could be more practical, he suggests. This, he argues, will empower industry while enabling 'consumers to make informed decisions based on specific nutrient requirements.' According to FCO rules, an SME involved in fertiliser needs to register separately in each state where it wants to operate. 'A few years ago, an initiative was launched to create a common portal for fertiliser manufacturers to register and operate nationwide. However, the effort reportedly didn't succeed, and the project ultimately fizzled out,' notes Kedia. Experts and stakeholders point out that the FCO bestows considerable authority upon individual inspectors, enabling them to suspend or shut down operations at their discretion. Experts point out that since fertiliser falls under the Essential Commodities Act, various departments may oversee it, depending on the state. 'In some cases, a single manufacturing unit may face oversight from as many as 32 inspectors, with the actual number on the ground often exceeding official records,' says Buddhe. From central government officials, such as the Deputy Director of Agriculture, Central Insecticide Inspector, Central Fertiliser Inspector, and Plant Protection Officer, to state government officials, such as the Chief Quality Control Officer, Chief Inspector (Seed), Deputy Director (Fertiliser), Technical Officer (Fertiliser), and Technical Officer (Insecticide), oversee the operations of fertiliser units. At the grassroots level, the Taluka Agriculture Officer adds yet another level of scrutiny. Additionally, flying squads from the Department of Agriculture conduct sudden inspections, he notes. 'This (several levels of inspection) fragments operations and increases compliance costs by 30-40% for MSMEs. Small manufacturers spend Rs 3-5 crore annually on compliance, equivalent to 20% of their R&D budgets, making innovation unsustainable,' adds Buddhe. A Punjab-based fertiliser SME's promoter admitted that his company incurred huge expenses to obtain licenses, maintain quality control systems, and meet the specific packaging and labelling requirements of FCO. 'We have experienced a significant surge in costs over the years, and increasing input costs have further exacerbated the situation,' he says. 'The plethora of complex and uncertain rules and regulations is creating a challenging environment for small fertiliser manufacturers in the country,' says another SME based out of Uttar Pradesh. Suresh Prabhu states that in 1999, during his tenure as the Minister for Fertilizers, a new policy was launched to address the industry's issues arising from excessive regulations, with the ultimate goal of phasing out the ministry itself. 'With the advancements in logistics and digital technologies enabling timely compliance, I believe it's time to revisit and update the fertiliser policy that was drafted in 1999. A new policy is overdue,' Prabhu says. However, regulation isn't the only challenge for fertiliser MSMEs in the country; they also deal with a skewed subsidy structure that favours larger companies, says Kedia. 'The current subsidy structure favours large manufacturers, giving them an uneven advantage. They receive subsidies on products with added micronutrients like zinc and boron. However, smaller players selling standalone micronutrient products don't get similar subsidies, putting them at a disadvantage.' After overcoming these initial hurdles, fertiliser MSMEs confront further challenges related to quality control for their smooth operations. Quality control The 2011 paper 'Fertilizer Quality Control in India: The need for a systemic change' by Sumita Kale and Laveesh Bhandari, published by FISME, stands out as one of the very few comprehensive studies on this topic. It highlights excessively strict tolerance limits and inadequate testing methods, especially for micronutrient fertilisers, as pressing concerns. The paper indicates that there are limited testing labs, which are poorly equipped and understaffed; additionally, it notes that sampling procedures are defective, all of which together undermine the accuracy and credibility of results. iStock Experts and stakeholders point out that the FCO bestows considerable authority upon individual inspectors, enabling them to suspend or shut down operations at their discretion. Numerous problems remain unresolved to this day, according to experts and stakeholders. The Central Fertiliser Quality Control & Training Institute (CFQCTI), Faridabad, has 'no information' on registered fertiliser dealers across the country, as per the RTI response received by ET Digital. Additionally, there was no definite number provided for fertiliser samples analysed and found non-standard in the last five years. Experts say that, despite increased capacity, testing labs are still unable to manage the minimum required samples, indicating a shortage of full-time inspectors. To maintain testing standards, the central government, however, established the National Accreditation Board for Testing and Calibration Laboratories ( NABL ), which accredits testing labs. Under the FCO, only 'approved' labs can conduct tests. Chakraborty highlights that most state laboratories fail to meet testing standards, with less than 5% being NABL-accredited. He recommends setting a strict deadline for NABL accreditation, requiring states to comply within a set timeframe, and not using non-NABL lab reports for criminal action against SMEs. 'We have increased the sanction of money to states for NABL accreditation of laboratories. We are actively addressing these issues,' says Agriculture Secretary Chaturvedi. Currently, there are 84 operational Fertilizer Quality Control Laboratories in India, including the four set up by the Central Government—the Central Fertilizer Quality Control & Training Institute, Faridabad, and its three associated regional laboratories. 'One nation, one license' To streamline operations of fertiliser units, Rahul Mirchandani, President of the Indian Micro-Fertilizer Manufacturers Association (IMMA), suggests a single licence for the entire country. 'With 'one nation, one license,' the FCO regulations should align with tax regulations, allowing businesses to bill and operate nationwide without state-specific constraints. This would eliminate the need for redundant licenses and reduce overhead costs,' says Aried Agro Crop Science's Chairman, Mirchandani. Experts believe key reforms are necessary to reduce import dependency, including limiting inspectors' powers and removing non-subsidised fertilisers from the Essential Commodities Act. They argue that stringent regulations, where minor lab errors can lead to jail time, create excessive fear among manufacturers and importers. Associations also demand a centralised portal for fertiliser. 'A centralised, pan-India licensing framework with a single-window digital compliance portal can reduce friction for manufacturers. Importers should also align with similar documentation and regulatory standards to ensure a level playing field. Additionally, creating a dedicated Department of Fertiliser and Agriculture Department liaison cell and encouraging PSUs to allocate a percentage of tender volumes to Indian small-scale manufacturers,' says Abhishek Wadekar, Founder & Chairman, Tradelink International. iStock Experts say that, despite increased capacity, testing labs are still unable to manage the minimum required samples, indicating a shortage of full-time inspectors. Another senior government official agreed that a central portal for fertiliser manufacturers to register and operate across the country would be beneficial. To promote local fertiliser production, stakeholders are calling for clearer clause definitions and less regulation. They suggest distinguishing between 'spurious' (intentional adulteration) and 'deficient' (unintentional nutrient deficiency). Currently, even a 0.1% deviation beyond tolerance limits can lead to spurious labelling and criminal prosecution. Standardising documentation across states is also a priority for them. Wadekar proposes addressing this gap through measures like harmonised compliance, centralised registration, and support mechanisms. Nishant Kanodia, Chairman, Matix Fertilisers and Chemicals, suggests adopting a risk-based, digital-first compliance model from other sectors could be beneficial since it would focus inspections on high-risk areas and simplify procedures for manufacturers with a good compliance track record.
