Recently, India’s fertiliser policy has come under scrutiny. A major government company issued tenders for ‘soluble fertilisers’ that exclude ‘Make in India’ manufacturers. This issue is not just confined to the Government e-Marketplace (GeM) portal. Many public sector firms are intentionally sidelining local producers by misusing MSME and Make in India policies. The main problem lies in the outdated and disorganized Fertiliser Control Order (FCO). Indian startups must obtain licenses and set up warehouses in every state, while manufacturers from countries like China can sell products by simply uploading a document. They do not need state-level approvals.
The FCO was established under the Essential Commodities Act of 1955, a time when India’s production capacity was low. However, this same regulation now poses significant barriers for local production, especially in the soluble fertiliser sector. According to Dr. Suhas Budhe, an incubation mentor at IIM Nagpur, India imports over 500,000 tonnes of soluble fertilisers annually. This results in a loss of foreign currency and stifles local innovation. He noted that each startup faces scrutiny from as many as 32 FCO inspectors, creating immense pressure and hindering entrepreneurship. This approach is counter to the vision of ‘Atmanirbhar Bharat’ or self-reliant India.
Jayantibhai Kumbhani, chairman of the Chamber of Agri Input Protection in Ahmedabad, stated that few sectors in India experience such heavy oversight per unit. Immediate reforms to the Fertiliser Control Order are essential for India to become self-reliant in soluble fertilisers.
Vijay Thakur, president of OAM Maharashtra, echoed this sentiment. He believes that the requirement for state licenses and inspections discourages local companies while benefiting foreign manufacturers. Vinod Goyal, the national secretary of the Soluble Fertiliser Industry Association (SFIA), added that it is time to implement a ‘One Nation, One License’ policy. Local manufacturers should receive the same ease as foreign suppliers. Additionally, the number of inspectors should be limited, and a new law should be introduced for non-subsidised fertilisers, distinct from the Essential Commodities Act.
Goyal noted that domestic production of soluble fertilisers is gradually increasing. Recently, indigenous technology has been developed, but it suffers due to policy-related chaos. Marketing companies prefer imported products over local manufacturers to avoid regulatory hassles.
While the increase in soluble fertiliser imports indicates rising market demand, Indian MSME entrepreneurs are not reaping the benefits. This policy disparity is a serious mistake. The example of China is telling; in 2001-02, their MSMEs primarily produced raw materials, but today they are among the world’s leading manufacturers due to well-crafted policies and strategic investments.
The central government has initiated support for R&D and import-substituting technologies. However, until the regulatory framework changes, this innovation will not reach the fields. The SFIA states that inconsistencies among state governments, misuse of policies, and oppressive actions of officials have made this sector stagnant, contradicting the vision of a self-reliant India.
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