Over 42% of the population of India is farmers. Most important components of the system are fertilisers. Currently, the country supplies 1.45 crore and is still improving and boosting subsidies.
As per the Department of Fertilisers 2023-2024 Annual Report, India’s fertiliser consumption is 359.20 LMT. India is the 2nd highest consumer of fertiliser, the 3rd highest producer of fertiliser.
Even though affordable fertiliser niche markets are still imported. Government support, closing gaps in demand and supply, is the reason new start-ups in the sector are focusing on the logistics and technology space rapidly filling the gaps in Fertiliser manufacturing and supply.
Read More: How to Start Biofertilizer Production Unit?
Fertiliser Statistics
Fertiliser statistics are disproportionate to the efforts spent on the individual components of a fertiliser system. For example Urea growth statistics of 238.99 LMT in 2018-2019 to 314.09 LMT in 2023-2024 are staggering. As quoted, “India is in a uniquely favorable position”.
India also produced 42.97 LMT DAP and complex fertilizers 101.85 LMT. In India, trade positions concerning foreign fertilizers have greatly improved. However, 176.95 LMT of fertilizers, which included Urea, DAP, and MOP, have been and still are imported.
Due to the unexploited possibilities in the industry, new players have also been driven to import and manufacture value-added fertilizers. This is evidenced by the ₹1.45 lakh crore budget set aside for subsidies on fertilizers and for supportive activities on the industry.
Key Development Driver for Startup
India’s fertilizer boom is powered by four main factors:
- Strong government support: Schemes like MDA and Gobardhan provide financial assistance for biological fertilizer units.
- Technology Revolution: Products such as Nano urea and nano DAP are improving efficiency.
- Export Extension: Trade links with Nepal, Bhutan and Sri Lanka are creating new export markets.
- Retail Modernization: Farmers Samriddhi Kendras (PMKSKS) now serve as a distribution hub ready for startups at 2.14 lakhs.
Proposed initiatives for new business
Fertilizer-Producing Plants
According to the MDA, the government is willing to provide subsidies to the fragmented agricultural market in order to support the manufacture and sale of organic fertilizers.
For example ,fermented manures and phosphate-rich organic manures, to registered primary producing and marketing cooperatives of Sri Lanka (PMKSKs). This is additionally a contribution to the circular economy.
Nano and Bio Fertilizers
By July 2024, the sale of Nano Urea is estimated to cross 80 million bottles. The nano-bio-composite market is expected to be extremely profitable. This is even more true given the strategic partnerships with PSUs that facilitate fast-track approvals.
Read More: Top 5 Organic Fertilizer Business Opportunities for Entrepreneurs
Substitutes for Potash and Phosphate
Bio nano partners are expected to modularly reduce the current MOP imports, the primary source of potassium. With proper distribution of Bio nano blends, the demand for Potassium and Phosphate Bio Nano blends will soar.
This will reduce the processing cost significantly and farmers will be the ultimate winners. This will definitely fuel the next wave of modern start-ups.
Exporting to neighboring countries
Indian government is signing MoUs to guarantee that start-ups offer organic fertilizers a secure supply of raw materials. As a result, organic menstrual hygiene product start-ups which are manufactured have been supplied with an unprecedented propel of materials to work with.
Shipping fertilizers
An opportunity worth pursuing is setting up an a digital platform to serve the 2.14 lakh PMKSKS users. It would enable producers, farmers, and retailers to create and use collaboratively and effortlessly a digital ecosystem. Other future possibilities include providing drones for soil testing and fertiliser application.
Turning a waste to a wealth
The organic fertilizer market in the MDA geographical boundary is served well by the SATAT biogas program, which yashaswi promotes and sells biogas. It promotes decentralized organic production by making biogas the focus of integration.
The revered biogas system, in which two additional profitable enterprises may be created, biogas services and cash positive, along with the system of sustainable biogas, captures the essence of the loop.
Amidst the restorative environment potential of revered biogas, profitable is not a contradiction. As I integrate these two ideas, I create a biogas production cycle.
Read More: Easy Steps to Start a Fertilizer Producing Company
What Section of The Import Export Insights Covers
What trade statistics tell us every day is that the fertilizer market, in general, is a goldmine that is yet to be fully tapped. The MOP imports of Urea is 70.42 LMT and it is interesting to note that the imports of MOP stand at 28.69 LMT.
The community talks about replacing potash and phosphates trade with that of ummer. The new traders can take advantage of the new trade export market which has emerged because of the new trade agreements with the neighbouring area of the country.
Entrepreneurship Government Portals
- Department of Fertilizers
- GOBARdhan Scheme
- Implemented by the Ministry of Agriculture, PMKSK
- SATAT Scheme
All of them have policies and other fundamental documents needed for tender sponsorship and start-up.
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Government Entrepreneur Websites
- Department of Fertilizers
- GOBARdhan Scheme
- PMKSK (managed by the Ministry of Agriculture)
- SATAT Scheme
These websites contain policies and other materials pertaining to the start-up tenders and documentation.
Business Models Open to Founders
- Export Joint Ventures: Partner with PSUs to access the Southern Asia market.
- Export Joint Ventures: Collaborate with PSUs to enter the Southern Asia market.
- Tech Logistics: Design computer control systems to oversee fertilizers and drones used in fertilizer application.
- Cluster Manufacturing: Establish collaborative fertilizer production with MSMEs.
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Strategies for New Startup Implementation
- Locate other target markets, such as organic or nano fertilizers.
- Complete application for MDA and other government. incentives.
- Establish agreements with CBG plants for the supply of raw materials.
- Employ PMKSKs and other digital platforms for sales.
- Collaborate with NPCS for ultimate detailed Project Report.
- Use drones and other sophisticated testing devices for rapid scale-up.
How NPCS Can Help You
At Niir Project Consultancy Services (NPCS), we assist entrepreneurs in establishing a profitable fertilizer business through expert advice and meticulous project formulation.
Detailed Project Reports (DPRs) prepared by us cover the manufacturing procedure along with required inputs, demand of the market, plant configuration, and complete financials.
Our professional services assist Startups in risk mitigation, garnering financial investments, and confidently launching the business. In other words, NPCS makes the project in the fertilizer space technically sound, financially profitable, and strategically positioned for future expansion.
Find the Best Idea for Yourself With our Startup Selector Tool
Conclusion
The fertilizer industry in India is witnessing rapid changes. In addition, the soaring demand coupled with the emergence of new technologies, export channels, and unprecedented government support provides a ‘now or never’ strategic entry opportunity.
With every import gap, there is a business opportunity. For every new export, there is an entire global market available.
Startups with a ‘go-getter’ attitude will determine the future of agriculture in India. With the guidance of NPCS, smart planning, astute investment, and future-aligned business planning will enable you to realize the vision of the country.
FAQs
Q1: What is the reason for the interest in the Indian fertilizer market at this point of time?
A: Government support in the form of subsidies paired with innovative technologies is driving demand.
Q2: What is the most favorable avenue for new players in the market?
A: Organic, nano, and bio types of fertilizers.
Q3: Do young enterprises have an easier time exporting fertilizers?
A: Yes. India’s MoUs with Nepal, Bhutan, and Sri Lanka facilitate exports to these countries.
Q4: What is the use of PMKSK centers to these new enterprises?
A: They may gain easy access to product distribution and enhanced brand visibility.
Q5: What help do NPCS provide to the fertilizer startups?
A: NPCS assists with comprehensive project reports, market feasibility studies, and professional managerial consulting.