FERTILIZER INDUSTRY IN INDIA

 Fertilizer is a mixture of substances applied to soil or plants to provide essential

nutrients for their growth and development. These nutrients include nitrogen,
phosphorus, potassium, and other elements necessary for plants.
 Fertilizers are used in agriculture and gardening to enhance soil fertility and promote
plant growth, increasing crop yields.
 The industry made a very humble beginning in 1906 when the first Single Super
Phosphate (SSP) manufacturing unit was set up in Ranipet near Chennai with an
annual capacity of 6000 MT.
 India Fertilizer Market was valued at USD 41.2 Billion in 2023 and is expected to
reach USD 70.2 Billion by 2032, at a CAGR of 6.1% during the forecast period 2023
– 2032.
 India ranks third place in the world’s overall fertilizer production, second in nitrogen
fertilizers, and third in phosphate fertilizers R
 Moreover, about 25% of GDP market capitalization is from fertilizers. At present, 57
fertilizer units are manufacturing many nitrogen fertilizers. These include 29 urea-
producing units and 9 ammonia sulfate-producing units as a by-product.
 Besides, there are 64 small-scale producing units of single super phosphate. For
instance, in 2020, the government launched the PLI (production-linked incentives)
scheme to promote domestic agrochemicals manufacturing, and in 2021, the DBT
(Direct Benefit Transfer) scheme for fertilizer subsidy.
 The growth of the fertilizer market in India is closely tied to the demand from the
agricultural sector. With a significant portion of India’s population engaged in
agriculture, the increasing need for food production led to a higher demand for
fertilizers.
 Major Players
The market is fragmented with key players including:
- Chambal Fertilizers & Chemicals Ltd
- Coromandel International Ltd
- Indian Farmers Fertiliser Cooperative Limited (IFFCO)- National Fertilizers Ltd
 The fertilizer industry is capital-intensive.

 Fertilizers were declared an essential commodity through the Essential Commodities

Act of 1955 so that the government could regulate the trade price and quality of the
fertilizer in the country.

LICENSES AND AUTHORISATION NEEDED TO START A FERTILIZER

INDUSTRY

1. Dealer license for trading in fertilizers

  The procedural requirements are detailed in Clause 8 of the Fertilizer Control Order
(FCO). Application has to be made in Form A/ Al to Controller of Fertilizers of the
concerned State/UT for obtaining registration/license as Industrial Dealer in fertilizers
or dealer in fertilizers for agricultural sales, respectively, along with fee prescribed
under Clause 36 and certificate of source in Form O.
 Fertilizer (Control) Order, 1985 which is administered by the Department of
Agriculture Cooperation, Govt. of India has been issued under the Essential
Commodities Act, 1955. The FCO lays ,down as to what substances qualify for use as
fertilizers in the soil, product-wise specifications, methods for sampling and analysis
of fertilizers, the procedure for obtaining license/registration as manufacturer/dealer in
fertilizers and conditions to be fulfilled for trading thereof, etc.

8. Application for intimation or registration (THE FERTILISER (CONTROL) ORDER 1985)

1. Every person intending to sell or offer for sale or carrying on the business of selling of fertilizer as Industrial
Dealer shall obtain a certificate of registration from the controller by making an application in Form A together
with the fee prescribed under clause 36 and a Certificate of source in Form O.

2. Every person including a manufacturer, an importer, a pool handling agency, wholesaler and a retail dealer
intending to sell or offer for sale or carrying on the business of selling of fertilizer shall make a Memorandum 7
of Intimation to the Notified Authority, in Form A1 duly filled in, in duplicate, together with the fee prescribed
under clause 36 and certificate of source in Form O.

3. On receipt of a Memorandum of Intimation, complete in all respects, the Notified Authority shall issue an
acknowledgment of receipt in Form A2 and it shall be deemed to be an authorization letter granted and the
concerned person as an authorized dealer for the purposes of this Order.

Provided that a certificate of registration granted before the commencement of the Fertiliser (Control)
Amendment Order, 2003, shall be deemed to be an authorization letter granted under the provisions of this
Order:

Provided further that where the applicant is a State Government, a manufacturer or an importer or a
poolhandling agency, it shall not be necessary for it or him to submit Form O.

Provided also that a separate Memorandum of Intimation shall be submitted by an applicant for whole sale
business or retail dealership, as the case may be: Provided also that where fertilizers are obtained for sale from
different sources,a certificate of source from each such source shall be furnished in Form O.”

Provided also that where the manufacturer of organic fertilizer is a State Government or municipality, it shall
not be necessary for it to obtain the authorization letter: Provided also that where the manufacturer of
vermicompost, other than a State Government or municipality, has annual production capacity less than 50
metric tonnes, it shall not be necessary for him to obtain the authorization letter.

2. Certificate of source/ Manufacture-

A certificate of manufacture of fertilizer is a document that includes the following details:

 Number
 Date of issue
 Date of expiry
 Grades of fertilizer mixture that can be manufactured
 Authority that issued the certificate
  Details of the certificate of registration

The Fertilizer (Control) Order 1985 defines a "certificate of source" as a document that
indicates the source of fertilizer for sale. This certificate can be issued by a state government,
commodity board, manufacturer, importer, pool handling agency, or wholesale dealer
3. Pollution Non-Objection Certificate (NOC)/ Consent Certificate-
To establish a fertilizer manufacturing facility in India, a business entity must first obtain a
Consent to Establish (CTE) Certificate from the State Pollution Control Board (SPCB). The
CTE is a No Objection Certificate (NOC) that industrial units need to obtain before being
established from an environmental pollution perspective. The NOC can be valid for 1–5
years, depending on the category and SPCB. If the unit is not commissioned within this
period, the NOC must be renewed or reapplied.
the Department of Fertilizers (DOF) is required to grant a No Objection Certificate (NOC) or
export permission for exporting fertilizers in India. This is according to a notification from
the Directorate General of Foreign Trade (DGFT) dated January 7, 2019, which revised the
fertilizer export policy. The notification moved items from the "Restricted" category to the
"Free" category, but manufacturers and exporters must obtain prior permission from the DOF
in the form of an NOC
Steps to Obtain Pollution NOC
1. Site Selection and Preliminary Approval: - Identify a suitable location for the plant and get
the preliminary approval from local authorities.
2. Application Submission: - Apply to the State Pollution Control Board (SPCB). This
includes providing detailed project reports, site plans, and proposed pollution control
measures.
3. Environmental Impact Assessment (EIA): - Conduct an EIA study if required. This is
mandatory for certain categories of projects as per the EIA Notification, 2006 under the
Environment (Protection) Act, 1986.
4. Consent to Establish (CTE): - Obtain Consent to Establish from the SPCB, which ensures
that the proposed project complies with all environmental norms.
5. Consent to Operate (CTO): - After construction, obtain Consent from the SPCB before
commencing operations.
Key Environmental Laws and Regulations mandating NOC
1. The Air (Prevention and Control of Pollution) Act, 1981:
- Section 21: Consent is required to establish or operate any industrial plant.
- Section 22: Prohibition of emission of air pollutants beyond prescribed standards.
2. The Water (Prevention and Control of Pollution) Act, 1974:
- Section 25: Consent is required to establish or take steps to establish any industry or
operation.
 - Section 26: Provision for appeals against orders of refusal or withdrawal of consent.
3. The Hazardous Wastes (Management, Handling, and Transboundary Movement) Rules,
2016:
- Rule 5: Permission required for handling hazardous wastes.

4. Industrial License:
A license must be obtained from the Department of Industrial Policy and Promotion (DIPP)
for setting up the manufacturing unit.

5. Register For Udyog Aadhaar:

This is the first and most important step in the registration process. Udyog Aadhaar is a 12-
digit unique identification issued to small and medium businesses by the MSME Ministry
under the Government of India. This registration is to be done online from the official
website of the MSME ministry. Udyam Aadhaar registration is free and does not require a
fee. After registering, the government assigns a NIC code to the enterprise, which acts as an
identification number for future dealings. This code is needed when applying for licenses and
permits from state and central departments.

6. Register for Goods and Services Tax (GST):

All businesses must obtain GST registration from the Central Board of Excise and Customs.
The GST registration must be obtained in each state where the goods are to be sold. The
registration process is conducted online, though the applicant has to provide relevant
documents for proof.

7. Obtain Import Export Code (IEC):

All manufacturing units that are involved in either the import or export of goods require an
IEC code. An IEC code provides the business the right to transnational trade goods without
any customs duties or taxes. This registration can also be obtained online.

6. Tie up with TSDF operator/ HNM authorization

In India, setting up a fertilizer industry involves managing hazardous and non-hazardous
waste appropriately. A crucial aspect of this is tying up with a Treatment, Storage, and
Disposal Facility (TSDF) operator and obtaining Hazardous and Other Wastes (Management
and Transboundary Movement) (HNM) authorization
Process:
1. Identification of TSDF Operator: Identify a TSDF operator authorized by the State
Pollution Control Board (SPCB) to handle hazardous waste.
2. Agreement with TSDF Operator: Enter into an agreement with the TSDF operator for
the disposal of hazardous waste generated by your fertilizer manufacturing unit.
3. Submission of Agreement: Submit the agreement to the SPCB as part of the waste
management plan.
HNM Authorization process
 1. Application for Authorization: Apply for authorization under the Hazardous and
Other Wastes (Management and Transboundary Movement) Rules, 2016.
Submit Form 1 (Application for Authorization) to the SPCB, along with details of the
waste generated and the proposed method of disposal.
2. Required Documents:
Detailed project report including waste management plan.
Agreement with the TSDF operator.
Proof of previous compliance (if applicable).
Consent to Establish (CTE) and Consent to Operate (CTO) from the SPCB.
3. Inspection and Verification: The SPCB will inspect the facility and verify the details
provided in the application.
4. Grant of Authorization: Upon satisfactory inspection and review, the SPCB will grant
the HNM authorization, specifying the types and quantities of waste allowed for
treatment, storage, and disposal.

7. Fire Safety Certificate:

A fire safety certificate must be obtained from the local Fire Service Department before
commencing the manufacturing operations.

8. ISO certificate
ISO 9001 certification is not mandatory for businesses, but it can be beneficial. Certified
companies generally have higher customer satisfaction, and ISO certification is required to
win big contracts in some sectors
The International Organization for Standardization (ISO) has several standards for fertilizers,
soil conditioners, and beneficial substances, including:

 ISO 18644:2016
Specifies requirements for testing methods, sampling, preparation of test samples,
marking and labelling, and packaging, transport, and storage of controlled-release
fertilizers
 ISO 7408:1983
Determines the ammoniacal nitrogen content in fertilizers in the presence of other
substances that release ammonia when treated with sodium hydroxide

7. Trade License
Municipal Corporation or Local Body: Obtain a trade license to conduct business activities
within a municipal area.

8. Incorporation and Business Registration

Registrar of Companies (RoC): Incorporate your business as a Private Limited Company,
Public Limited Company, Partnership, or Limited Liability Partnership (LLP) under the
Companies Act, 2013.

9. BIS Certification
Bureau of Indian Standards (BIS): Certification for product quality compliance, including
standards like IS 8189 (urea), IS 8268 (single superphosphate), and others.

LAWS APPLICABLE TO THE FERTILIZER INDUSTRY IN INDIA

1. Fertilizer Control Act Order 1985
The Fertilizer (Control) Order, 1985 (FCO 1985) governs the regulation of the manufacture, sale, and
distribution of fertilizers in India. It outlines various provisions that must be complied with to open
and operate a fertilizer industry

Key Provisions of the Fertilizer (Control) Order, 1985

1. Registration of Industrial Units: - Clause 7: Every person desiring to manufacture any fertilizer
specified in the Schedule must obtain a certificate of registration for the industrial unit from the
Controller (State Government or Central Government).

2. Grant of Certificate of Manufacture: - Clause 8: The application for a certificate of manufacture

must be submitted to the Controller in Form A1, along with the necessary documents.

3. Conditions for Manufacture: - Clause 11: The manufacture of mixtures of fertilizers must comply
with the standards set out in the FCO. The manufacturing premises must have proper facilities for
sampling and testing of the products.

4. Quality Control and Testing: - Clause 19: The manufacturer must ensure that fertilizers meet the
specified quality standards and provide testing facilities. The manufacturer must maintain a
laboratory or have access to a recognized laboratory for quality control.

5. Labelling and Packaging: - Clause 21:Fertilizers must be properly labeled and packaged. The label
must include the name of the fertilizer, the content of nutrients, the manufacturer’s name and
address, and the net weight.

6. Inspection and Sampling: - Clause 27: The Controller or any authorized inspector has the right to
inspect the manufacturing premises, take samples, and ensure compliance with the FCO.

7. Licensing for Dealers: Clause 8A: Fertilizer dealers must obtain a license to sell, offer for sale, or
distribute fertilizers. The application for a dealer’s license must be submitted in Form A2 to the
Controller.

8. Appeals: Clause 32: If an application for a certificate of registration or manufacture is refused, the
applicant can appeal to the appellate authority within 30 days of the decision.
2. Legal Metrology Act 2009
The Legal Metrology Act, of 2009, governs the standards and regulation of weights and
measures in India. This Act ensures that all goods sold in the market adhere to specific
measurement standards to protect consumer interests and ensure fair trade practices. For
opening a fertilizer industry, compliance with the Legal Metrology Act, 2009, and its
associated rules is crucial, particularly regarding the packaging and labeling of fertilizers.
Important Provisions of the Legal Metrology Act, 2009
1. Approval of Models - Section 22: Any weight or measure used must be approved by the
prescribed authority. This ensures that all instruments used in the manufacturing and
packaging processes are accurate and standardized.
2. Verification and Stamping: - Section 24: Every weight or measure used or intended to be
used in any transaction or protection must be verified and stamped by the legal metrology
officer to ensure accuracy and conformity with the standards.
5. Packaging and Labelling Requirements - Section 36: Mandates that all pre-packaged
commodities (including fertilizers) must adhere to the packaging and labelling requirements
specified in the Legal Metrology (Packaged Commodities) Rules, 2011.
Legal Metrology (Packaged Commodities) Rules, 2011
1. Declarations on Packages:
- Rule 6: Specifies that every package must bear the following declarations:
- Name and address of the manufacturer/packer/importer.
- Common or generic name of the commodity.
- Net quantity in terms of standard units of weight or measure.
- Month and year of manufacture/packing/import.
- Maximum Retail Price (MRP), inclusive of all taxes.
- Consumer care details.
2. Net Quantity: - Rule 8:Specifies that the net quantity must be declared in terms of weight,
measure, or number, using the standard units.
3. Registration of Manufacturer, Packer, or Importer: Rule 27: Every manufacturer, packer, or
importer of packaged commodities must register themselves with the Director of Legal
Metrology or the Controller of Legal Metrology in the state.

3. Constitutional Provisions on Fertilizer Policy

The fertilizer industry in India falls under the purview of the Union Government as it is listed
in the First Schedule of the Industries (Development and Regulation) Act, 1951, specifically
under Entry 52 of List I and 33 of List III.

4. The Integrated Plant Nutrition Management Bill 2002

Bill aims to regulate and promote the sustainable use of fertilizers, including bio-fertilizers,
nano-fertilizers, and organic fertilizers, in India.
The key sections are:
1. Registration Requirements:- The Bill mandates that no person or entity can manufacture,
sell, import for sale, or market fertilizers without obtaining the appropriate registration from
the authority. This ensures that all players in the fertilizer industry comply with established
standards and regulations.
2. Price Control and Distribution:
- The Central Government has the power to fix maximum prices for fertilizers to regulate
their equitable distribution and ensure availability at fair prices. This provision aims to
prevent market exploitation and ensure affordability for farmers【7†source】.
3. Inspection and Enforcement:
- State Governments are empowered to appoint State Controllers of Fertilizers and
Fertilizer Inspectors. These officials have the authority to conduct inspections and search,
seize, and confiscate non-compliant products. This provision strengthens regulatory
enforcement at the state level. L

5. The Fertilizer (Price Control) Bill 2013:

The Fertilizer (Price Control) Bill, of 2013 contains several provisions aimed at regulating the
prices of fertilizers to ensure affordability for farmers while maintaining fair pricing practices
in the industry. Key provisions include:
1. Price Fixation and Control: The bill mandates the government to fix and regulate the
maximum retail prices (MRPs) of various fertilizers. This prevents exploitation by
manufacturers and retailers, ensuring that fertilizers are available to farmers at reasonable
prices.
2. Subsidy Management: It outlines the mechanisms for distributing subsidies to fertilizer
manufacturers and importers. The government subsidizes certain fertilizers to reduce the
financial burden on farmers and promote agricultural productivity.
3. Quality Control and Standards: The bill includes provisions for maintaining the quality of
fertilizers. It mandates regular inspections and quality checks to prevent the sale of
substandard fertilizers. This ensures that farmers receive products that meet the required
agronomic standards.
4. Penalties for Non-compliance: There are specified penalties for entities that do not comply
with the price control and quality standards. This includes fines and potential imprisonment
for severe violations, aiming to deter malpractice in the industry.