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  • Assistance in obtaining Licences and Permit for Fertilizer Industry.
  • Arranging Documents required for the setup of the unit.
  • Legal assistance in the setup of the business.
  • Coordination with authorities in case of issues in the application.

Overview of the Fertilizer Industry in India

Fertilisers are used to supplement the nutritional requirements for crops by increasing the nutrient content of certain elements in the topsoil. These nutrients are primarily phosphorus (P) and potassium (K), and, most importantly, nitrogen (N). Fertilisers require raw materials like natural gas and coal used as feedstock. In addition, raw material that forms the source of fertiliser production, like ammonia, sulphuric acid and phosphoric acid, are also needed. Diammonium phosphate urea and potassium chloride (aka Muriate of Potash or MOP) are the key ingredients for phosphorus, nitrogen and potassium fertilisers, respectively. Because of the limited production of diammonium phosphate and potassium chloride, India imports these compounds from other countries. On the other hand, nitrate fertilisers have a 3/4th share in total fertiliser production in the country. The Fertilizer Industry is capital intensive and also requires a series of licences and authorisations as fertilisers are categorised as an essential commodity in the country. The concerned state government provides a certificate for manufacturing of physical or a granulated mixture of chemical fertilisers. Licence is also required in the case of organic Fertiliser and biofertiliser manufacturing. Continue reading to get a complete overview of India's fertilizer industry and the requirements to set up a Fertiliser manufacturing plant.

Importance of the fertilizer industry in India

India meets 80 % of urea requirements through domestic production. This is primarily due to the subsidies provided to urea manufacturers for transportation costs to facilitate its availability at the same MRP all over the country. To ensure adequate availability of the right quality of fertilisers at the right time and right price to farmers, Fertiliser was declared an Essential Commodity. Fertilizer Control Order (FCO) was promulgated u/s 3 of the Essential Commodities Act of 1955 to regulate the trade, price, quality and distribution of fertilisers in the country.

Factors that are fuelling the growth of the Fertilizer Industry

Market: Apart from raw materials in manufacturing chemical Fertilisers, the market is also an essential factor. As urea is the most commonly used chemical fertiliser, it has remained a highly regulated commodity and has its retail price fixed by the government.

Technology: Chemical processes to make quality fertiliser with less waste generation makes the upgradation of technology an imperative. Besides, fuel efficiency is also an essential aspect owning to the energy-intensive nature of the fertilizer industry. As the industry is invested highly in technology and R&D, production has significantly increased.

Energy:It is another critical factor that has supported the growth of fertiliser industries in the country. Since the fertilizer industry is energy-intensive, many plants are located where cheap energy is available.

Government policy: It is another major factor deciding the increase of fertiliser manufacturing units besides the raw material vicinity. Administered Price Mechanism earlier determined the fertilizer industry prospect in India. International agreements led to an increase in exports, and the regular revision of subsidies to regulate consumption has, in turn, led to the growth of this industry. 

Licences and Authorisations needed by the Chemical/ Organic Fertilizer Manufacturing Unit

The FCO allows the registration of manufacturers, dealers and importers of all types of fertilisers manufactured/ sold in and outside the country. The regulation on the manufacture, packing of fertiliser mixtures and marking on the bags, setting up of quality control laboratories, the appointment of enforcement agencies and prohibition on the manufacture /import and sale of non-standard/spurious/adulterated fertilisers.

Certificate of manufacture of Fertiliser

A certificate of manufacture is needed to prepare a mixture of fertilisers or a special mixture of fertilisers under the Fertiliser (Control) Order, 1985. The project proponent must make an application to the concerned authority along with the following documents for this certificate

  • Application in FORM D of the order
  • ID&address proof
  • Copies of educational qualification of chemist
  • Laboratory Facility Certificate
  • Proof of ownership of the premises/ Rent deed
  • Sketch and location map of the mixing unit
  • particulars of such mixtures handled, the period and place (in case the applicant has been carrying on the business)
  • Details of raw materials
  • Type of Fertiliser to be prepared
  • Application fee

Validity of Certificate to manufacture: Every certificate of manufacture granted under clause 15 of the Fertiliser (Control) Order, 1985, for preparation of a mixture of fertilisers will, unless cancelled or suspended, be valid for three years from the date of issue.

Pollution NOC/ Consent Certificate

Different fertilisers employ different techniques and therefore fall under different categories in the list of industries maintained by CPCB. The application for Consent, therefore, needs clarity on the NOC process, and the application must be made accordingly. Industries manufacturing basic Fertiliser (excluding formulation) are among the 17 highly polluting industries and have been categorised as Red category industries. Fertiliser manufacturer involved in fertiliser granulation, formulation or blending is under the orange list of industries. Biofertilizer manufacturing units that do not use inorganic chemicals are categorised as a white industry. Any industrial establishment that manufactures fertilisers will have to go through the three stages of the consent process- document scrutiny, site inspection and addressing the issues raised by the board. The documents required at this stage are

  • Online application form through the OCMMS portal of the board
  • Plant layout map with the location
  • Land Documents
  • Project Report Details, project cost, manufacturing process, production flow chart etc.
  • List of machinery and installed pollution control devices.
  • Environmental Clearance(if required)
  • PAN Card and Aadhar Card/Voter ID
  • Copy of CTE
  • Previous CTO (for renewal).
  • Lab test and compliance report.
  • Undertaking for compliance with CTE or previous CTO conditions
  • Any other document mentioned in the application.

Factory Licence

Any Fertilizer Industry falling under the definition of a factory must obtain a factory licence from the state department. The documents required for securing a factory Licence are

  • Online Application form
  •  Requisite fees.
  • ID proof (Occupier and Manager)
  • List of partners and directors
  • Proof/supporting documents of Occupier as Director/ Partner/ Proprietor of the factory.
  • Latest electricity bill
  • Proof of occupancy
  • Flow chart of the fertiliser manufacturing process
  • List of raw materials used.
  • List of machinery installed.
  • CTE/CTO issued by the Pollution Control Board of State
  • Copy of Project Report

Additional Licences and permissions to set up a Fertilizer Industry

  • Udyog Aadhar Registration
  • Tie-up with TSDF operator/ HWM authorisation.
  • Fire NOC
  • Trademark Registration
  • ISO certification

Market Overview of the Fertilizer Industry in India

India is an agricultural economy where it is necessary to ensure the availability of fertilisers for efficient farming operations. We are the world’s third-largest manufacturer and second-largest consumer of fertilisers in the world. The fertilizer industry has made decent progress in the case of Urea (N-based Fertiliser). India also ranks3rd in production of phosphatic fertilisers and 2nd in the manufacturing of nitrogenous fertilisers. Production of fertilisers in India has witnessed a surge in the past decade, reaching an annual production of 43.66 million metric tons (MMT)in 2021-22, almost twice the capacity in 1990-91, which was 22.23 MMT.

Scope of the Fertilizer Industry

Fertiliser demand is influenced by the change in crop patterns in the region, crop mix, crop prices and fertiliser-to-crop price ratios, subsidy regimes, nutrient management regulations, nutrient recycling practices and innovation in technology. This industry is an excellent scope due to the following unique advantages in the case of India.

  • Population: The increasing population and demand for food security provide brighter prospects for the fertilizer industry of more growth.
  • Food consumption: The food consumption pattern and demand for an improved variety of food grains with improved attributes increases the role of fertilisers in their production.
  • Fertiliser awareness: With the increase in education, literacy and the reach of digital means of communication, awareness among farmers to use fertilisers increased, which increased its demand in the states where fertiliser application was not a common practice.

How will Enterclimate Assist You?

One-Stop Solution to all Export related formalities

Enterclimate provides comprehensive support for all legalities to set up a Fertiliser manufacturing plant. We provide all-inclusive assistance from the start to the end of your unit’s setup

Expert Solutions by a Seasoned Team

Our team comprises experts from various domains like law, CAs and CS who will make the licencing and authorisation process possible under the same roof.

Seamless Post-Compliance Handling

Enterclimate experts have a quick and accurate response rate. We ensure that our communication is always seamless and address all the issues common in the setting up a fertilizer manufacturing

Unit.

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