Outdated fertiliser rules favour imports over domestic production: Industry

The government's "outdated" fertiliser regulations are creating an uneven playing field, favouring Chinese imports over domestic manufacturers and undermining the "Make in India" initiative, industry bodies said on Tuesday.
The fertiliser control framework's concurrent naturegoverned by both central and state authoritieshas led to numerous amendments but has struggled to keep pace with evolving domestic needs and global developments, gradually coming to be seen as a relic of the legacy "Inspector Raj" and "License Raj", they said.
The industry bodies called for comprehensive reforms including implementing "One Nation, One Licence" policies, ensuring regulatory parity between domestic and foreign manufacturers, and capping inspector numbers to two per unit.
The Soluble Fertilizer Industry Association (SFIA), in a statement, said a major public sector enterprise recently issued tenders for soluble fertilisers that explicitly excluded "Made in India" products, highlighting how current regulatory frameworks discourage local production while facilitating imports.
Under India's Fertilizer Control Order (FCO), domestic startups must obtain multiple licences, maintain offices and establish warehouses in every state where their products will be distributed. In contrast, foreign suppliers face minimal compliance requirements, needing only basic import formalities to sell across all Indian states.
The FCO, established under the Essential Commodities Act of 1955, was designed to ensure fertiliser quality and monitor distribution during a period when India relied heavily on imports.
"However, the framework has struggled to adapt to modern domestic production capabilities," the statement added.
Suhash Buddhe, mentor at IIM Nagpur Incubation Cell, said India's production of 112.62 million tonnes of fruits and vegetables relies heavily on 5 lakh tonnes of imported, non-subsidised fertilisers.
"A single manufacturing unit is monitored by as minimum as 32 FCO inspectors, leading to excessive scrutiny and harassment under the guise of regulation. This overregulation deters startup growth and pushes India further into import dependence, instead of nurturing domestic innovation," Buddhe said.
Jayantibhai Kumbhani, President of the Chamber For Agri Input Protection (CAIP), Ahmedabad, said no other industry, including pharmaceuticals, faces such intense level of inspector oversight.
"In some cases, a single district can have many inspectors monitoring one fertiliser unit, creating undue pressure on Indian entrepreneurs," he said, emphasising the urgent need for FCO reforms to foster self-reliance in the non-subsidised fertiliser sector.
This view is echoed by Vijay Thakur, President of grassroots agri-entrepreneur association OAMA, Maharashtra, who shares similar concerns and advocates for urgent policy intervention.
The regulatory burden particularly affects soluble fertilizers, which are critical for horticulture growth. Unlike sectors such as electronics, pharmaceuticals and defence where the Central government's "Import Substitution" and "Make in India" initiatives have gained significant traction, the fertilizer sector has seen little progress.
"Grassroots innovation in manufacturing these vital compounds continues to struggle due to a lack of market access, constrained by the outdated and rigid provisions of the Fertilizer Control Order," according to the statement.
The high cost of setting up offices, warehouses, and securing licenses in each statecombined with the need for market partners to duplicate these effortserodes any competitive edge Indian manufacturers might have, it added.
SFIA National Secretary Vinod Goyal said, "A practical path forward includes implementing 'One Nation, One Licence,' ensuring parity with foreign manufacturers by allowing marketers to add sourcing in one state and market across all operational states for Indian sources, capping inspector numbers to two per unit, and ultimately enacting a new law for non-subsidised fertilizers outside the Essential Commodities Act to realise the vision of Atmanirbhar Bharat.

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