Context:
Industry bodies have raised concerns about India’s outdated fertiliser regulations, claiming they favour Chinese imports over domestic manufacturers, thereby undermining the “Make in India” initiative and hurting the growth of Indian startups in the sector.
Key Highlights:
- Regulatory Imbalance:
- Under the Fertiliser Control Order (FCO), 1955, domestic firms must obtain multiple state-level licences and maintain offices and warehouses across states.
- Foreign suppliers, however, face minimal compliance, needing only import permissions to operate pan-India.
- Discrimination Against Local Products:
- A PSU tender for soluble fertilisers explicitly excluded “Made in India” products, as per the Soluble Fertilizer Industry Association (SFIA).
- Overregulation and Harassment:
- Up to 32 FCO inspectors can monitor a single domestic unit, leading to excessive scrutiny.
- No comparable level of inspection exists even in sectors like pharmaceuticals.
- Impact on Innovation:
- Overregulation hampers grassroots innovation and discourages startups.
- Fertilisers, especially soluble ones crucial for horticulture, remain outside the broader “Import Substitution” and “Make in India” momentum seen in electronics, defence, etc.
Key Demands from Industry Bodies
- “One Nation, One Licence” for non-subsidised fertilisers to ease market access.
- Capping inspector numbers to a maximum of two per unit.
- Regulatory parity between foreign and Indian manufacturers.
- A new legal framework for non-subsidised fertilisers, delinking them from the Essential Commodities Act.
- Permission for Indian marketers to source in one state and sell across India.
Significance
- Atmanirbhar Bharat Goal: Reforming FCO can reduce import dependence, especially for fertilisers used in fruit and vegetable production (currently 5 lakh tonnes imported).
- Boost to Domestic Production: Simplified norms can encourage Indian manufacturers to scale up, innovate, and compete globally.
- Urgent Need for Policy Change: Aligning fertiliser regulations with modern industrial policy is essential for fostering self-reliance and rural sector growth.
