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Industry seeks customs duty waiver on fertilizer inputs

CHENNAI: The increasing requirement for imported DAP is attributed to the low capacity utilisation of DAP facilities in India. The DAP producers could not use the nine million tonnes of sulphuric acid input produced in the country through smelter and refined sulphur route in 2007-08.

This was because of the shutting down of operations of many fertilizer companies due to financial crisis, higher cost of production, delay in subsidy disbursements and non- availability of gas.

The Union Government’s approval to implement a nutrient-based pricing regime for all subsidised fertilizers, in place of the present product-based system in order to enable the balanced use of fertilizer, is a significant step towards promoting the growth of the fertilizer industry.

Sulphur, phosphoric acid, sulphuric acid, ammonia and rock phosphate are mainly imported for production of fertilizers. It is important to note that there is a declining trend in production of di-ammonium phosphate (DAP) and single super phosphate (SSP).

The domestic production of DAP has declined substantially to 4.21 million tonnes in 2007-08 from 4.85 million tones in the previous year and that of urea to 19.86 million tonnes from 20.3 million tonnes a year-ago.

The programme to import at least three million tonnes of DAP in the current financial year is expected to drive international prices.

It is felt that the Government should take steps to revive the fertilizer industry that will pave the way for reduced imports of DAP, urea and other fertilizers.

It s also felt that the Government should exempt customs duty on inputs such as sulphur and rock phosphate which will help reduce the bulging subsidy bill on fertilizers.

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