Amid the urea crisis caused by the Iran-related conflict, India and Russia have expedited the process of setting up a fertilizer plant through a joint venture. The plant is being set up in Samara, Russia, and is expected to be completed within the next two years. In this connection, an Indian delegation recently visited Russia.
This joint project between India and Russia involves an estimated investment of approximately ₹20,000 crore. Indian Potash Limited (IPL), Rashtriya Chemicals and Fertilizers (RCF), and National Fertilizers Limited (NFL) are the Indian entities involved in this urea project; The project will have a production capacity of 2 million tonnes and is being set up in Russia. Through this project, India aims to reduce its dependence on fertilizer imports.
Preparation to reduce dependence on Middle East
India is heavily dependent on nitrogen-based urea fertilizers for its agricultural sector. Currently, India imports about 71% of its urea needs from Middle East countries.
Three Indian public sector companies involved in the project
Indian companies—Indian Potash Limited (IPL), Rashtriya Chemicals and Fertilizers Limited (RCFL), and National Fertilizers Limited (NFL)—will together invest ₹10,000 crore. The remaining ₹10,000 crore will be invested by Russian chemicals company, ‘UralChem Group’.
This plant will prove to be a sustainable source of urea for India
MD of Indian Potash, P.S. Gehlot said that the project consultant, PDIL, has submitted its report. This plant is on its way to becoming a sustainable and reliable source of urea for India.
Fertilizer shortage: About 10 million metric tons.
**Expenditure on imports:** To meet the shortage of urea, India is completely dependent on imports. In 2025, India will spend around ₹20,000 crore on urea imports. **Purchase of urea through alternative routes**
In view of the crisis arising out of tensions between the US and Iran, the government has approved the import of 2.5 million tonnes of urea for the year 2026. This supply is being made directly from Algeria, Nigeria, Oman and Russia, bypassing the Strait of Hormuz.
Foundation of the project laid during Putin’s 2025 visit to India
The foundation stone of this project was laid in December 2025, when Russian President Vladimir Putin visited India. An MoU (Memorandum of Understanding) was signed between the two countries in the presence of Prime Minister Modi and President Putin.
Why is India setting up a factory in Russia?
Natural gas is the most important and most expensive raw material for making urea. Russia is one of the countries that has huge reserves of natural gas. Gas is not available in sufficient quantity within India, due to which it has to be imported from abroad at high prices. Precisely for this reason, producing urea in Russia proves to be more economical. Furthermore, Russia already has advanced technology and extensive infrastructure for urea production.
Why is urea important?
Urea provides essential nitrogen to the soil, which is a vital nutrient for plant growth. Proper use of urea in crops like rice, wheat and maize can increase the yield by 20% to 50%. Precisely for this reason, the government is fully prepared to prevent any kind of interruption in its supply. Amid the ongoing conflict between Iran and the US—and the crisis over crude oil supplies—the Indian government is now turning to E85 flex-fuel. The government is expected to soon issue a draft notification to approve the use of E85 fuel; This is a move that has already been widely agreed upon within the market.
