The fertiliser department is confident that the implementation of the new consumption norms will not result in the closure of any fertiliser plant. It also does not foresee any such possibility even if the proposals of the seventh and the eighth pricing regime are put into effect.
The department has expressed these views in a note prepared on the new pricing policy for the Cabinet committee on economic affairs (CCEA).
These views are in reply to specific queries raised by the agriculture department on a CCEA note. The Fertiliser Association of India has also criticised the new consumption norms and has expressed the apprehension that the implementation of these norms will result in the closure of many fertiliser units leading to a drop in urea production by around eight lakh tonne.
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The fertiliser department says it does not expect any volatility in the international price of urea in case India has to purchase huge amounts from the international market.
This is because China does not import urea any longer. Shortages, if any, can be covered with a mixture of long and short term contracts.
On the apprehensions expressed by the agriculture ministry regarding the inadequacy of infrastructure to handle imports, the fertiliser department has replied that the country has adequate facilities to handle high-volume imports.
In the past, India has handled imports of up to four million tonne without much problem.
The infrastructural facilities has only improved since then.