India, Russia fertiliser firms ink pact to set up USD 1.2 bn greenfield urea unit

New Delhi, Dec 5 (PTI) India's three fertiliser companies -- RCF, IPL and NFL -- on Friday signed an MoU with Russia's Uralchem to set up a greenfield urea plant with an estimated investment of USD 1.2 billion, according to sources.

The installed annual capacity of the greenfield plant, to be set up in a Russian city, will be 2 million tonnes. The plant is expected to be operational by mid-2028, they said.

India, which is a net importer of urea, will gain from this MoU by security assured supply from this proposed plant.

Announcing the signing of memorandum of agreement, the Union External Affairs Ministry said both sides welcomed steps to ensure "long-term supply of fertilisers to India and discussed the potential establishment of joint ventures in this area".

The ministry also said the MoU has been signed between JSC UralChem and a consortium of Indian firms Rashtriya Chemicals and Fertilizers Limited (RCF), National Fertilizers Limited (NFL) and Indian Potash Limited (IPL).

The new facility will leverage Russia's natural gas and ammonia resources in urea production.

According to sources, RCF and IPL will own 45 per cent stake each in the proposed JV firm, while NFL will own the remaining stake.

The proposed investment of USD 1.2 billion will be met through equity and debt route, they added.

While India has enhanced domestic production of urea, but still imports to meet the domestic shortages. In 2024-25 fiscal year, the country imported 56.47 lakh tonnes, of which a large quantity was from Russia.

India has signed a similar agreement with Oman for assured supply of urea. PTI LUX MJH TRB