Decarbonizing India’s Fertilizer Sector and Strengthening The Nation’s Energy Security

India’s decarbonization efforts took a significant leap forward as the government took a historic step towards sustainable fertilisers, energy security and self-reliance. 

The Department of Fertilisers (DoF), Government of India, entered into an agreement by exchanging Green Ammonia Purchase Agreements (GAPA) and Green Ammonia Supply Agreements (GASA) between fertiliser companies and green ammonia producers.

These agreements mark a crucial step toward operationalising Green Hydrogen and Green Ammonia projects under the National Green Hydrogen Mission (NGHM).

Exchange of Green Ammonia Agreements (11 projects) for the fertilisers sector under the National Green Hydrogen Mission took place at New Delhi in the presence of Minister of Chemicals & Fertilisers, Mr JP Nadda; Minister of New and Renewable Energy, Mr Pralhad Joshi; and Minister of State for Power and New & Renewable Energy.

Senior officials, including Mr Rajat Kumar Mishra, Secretary, Department of Fertilisers, and Mr Santosh Kumar Sarangi, Secretary, Ministry of New and Renewable Energy, were also present, along with CMDs/CEOs of Fertiliser units and green ammonia producers.

During the agreement signing ceremony, Minister of Chemicals and Fertilisers, Mr J. P. Nadda, said, “The exchange of Green Ammonia Agreements marks a historic step in India’s journey towards sustainable fertiliser production.”

Minister added, “By integrating green ammonia into our supply chains, we are not only reducing carbon emissions but also ensuring long-term energy security and self-reliance. This initiative reflects the Government’s unwavering commitment to building a cleaner, greener future for our farmers and for the nation.”

India currently produces approximately 165–170 LMT of Phosphatic and Potassic (P&K) fertilisers, including DAP and NPK variants. However, a significant portion of domestic production remains dependent on imported ammonia.

Ongoing geopolitical developments have disrupted the global ammonia market, leading to volatility in both availability and prices, which in turn affects the stability of fertiliser production in India.

To address this challenge, Indian fertiliser companies have entered into long-term agreements to supply green ammonia at fixed prices for 10 years.

This strategic move is expected to ensure a stable and reliable supply of ammonia, thereby supporting consistent domestic production of P&K fertilisers and helping maintain price stability in the Indian market.

In addition, the adoption of green ammonia offers several broader benefits. It will help conserve foreign exchange by reducing import dependence, promote self-reliance in the fertiliser sector, and create new employment opportunities.

Furthermore, it is likely to encourage investment in developing green ammonia production capacity in the country.

A stable supply environment will also attract new players to the fertilisers sector, leading to the establishment of additional manufacturing units in the future.

Overall, this transition towards green ammonia marks a significant step towards strengthening India’s fertiliser security, enhancing sustainability, and building long-term resilience in the sector.

The agreements mark a key milestone in advancing green ammonia domestic production capacity and reducing import dependence.

The Government of India is implementing the NGHM with an outlay of ₹19,744 crore, aiming to produce at least 5 million metric tonnes (MMT) of green hydrogen per annum by 2030.

The Mission is designed to position India as a global hub for green hydrogen and its derivatives, while enabling sustainable growth and reducing dependence on imported fossil-based inputs.

The Department of Fertilisers, through close coordination with MNRE, SECI, and fertiliser manufacturers, is taking a decisive step toward building a low-carbon, future-ready fertiliser sector. 

This initiative marks a major leap in integrating green hydrogen derivatives into India’s fertiliser value chain and reinforces the nation’s commitment to clean energy transition.

Key Highlights

• Under the Strategic Interventions for Green Hydrogen Transition (SIGHT) Programme, the Solar Energy Corporation of India (SECI) conducted competitive bidding for the supply of green ammonia to fertiliser units nationwide.
• The bidding process discovered highly competitive prices, ranging from ₹49.75 to ₹64.74 per kg, significantly lower than international benchmarks (approx. ₹110 per kg).
• SECI has allocated a total capacity of 7,24,000 tonnes per annum (TPA) of green ammonia supply, linked to 13 fertiliser units across the country.
• The agreements exchanged today, with a 10-year term, provide long-term demand assurance, transparency, and investment security for scaling up green ammonia production.
• This initiative is expected to generate foreign exchange savings of approximately $2.5 billion over 10 years by substituting grey ammonia imports for urea imports in non-urea fertiliser units.

Major Benefits for the Fertiliser Sector

This initiative is expected to:

• Significantly reduce the carbon footprint of India’s fertiliser industry
• Enable transition from grey to green ammonia
• Strengthen India’s position as a competitive global supplier
• Result in foreign exchange savings of ~$2.5 billion over 10 years through reduced ammonia imports
• Support long-term sustainability and self-reliance in India’s fertiliser production. 

The following companies are scheduled to sign the agreements: