How to Start NPK Fertilizer Manufacturing in India, and Whether to Add CAN

NPK fertilizer manufacturing can start at very different scales, and one choice sets the scale: you either mix and granulate fertilisers you buy, or you react acids and ammonia yourself. Mixing and granulating needs a certificate of manufacture and a basic laboratory. Reacting your own inputs needs a far bigger plant. The project reports compared below put total investment between ₹16.65 crore and ₹55.81 crore.

Calcium ammonium nitrate (CAN) is a separate decision. It is ammonium nitrate blended with ground limestone or dolomite, and ammonium nitrate is a controlled material in India. Build the NPK line first, and add CAN only after your ammonium nitrate supply and permission are in writing. This guide is part of our chemical manufacturing ideas.

Which NPK route should you build: blend, granulate or react?

India's Fertiliser (Control) Order separates the routes by what happens to the materials.

Start with a granulated mixture if you can buy DAP, urea and potash reliably. Move to the complex route only when ammonia, acid and a distribution network for the volume are already secured.

How is NPK fertilizer made?

Grades are written N-P2O5-K2O, and for complex products the three numbers normally add up to 40 to 60 percent, says the Fertilizers Europe booklet on NPK production. The same booklet describes the mixed acid route:

1. Phosphate rock is digested in nitric acid, then other acids are added.
2. Gaseous ammonia neutralises the acid slurry in a reactor train ending in a buffer tank, at 100 to 140°C.
3. Ammonium phosphates, ammonium sulphate and potash are added, and the slurry is granulated in a drum, blunger or Spherodiser.
4. A drying drum removes water.
5. Screens separate product from fines and oversize. Oversize is crushed, and both return to the granulator.
6. A drum or fluid bed cooler lowers the temperature.
7. A coating drum applies an anti-caking agent.

In the pipe reactor route, acid and ammonia react inside the granulator, so the separate reactor train disappears.

What does one tonne of NPK consume?

At 80 percent phosphate solubility, the booklet's mixed acid route uses these inputs per tonne. Acids, ammonia and potash dominate, which is why this route suits large plants.

Which machines does an NPK and CAN plant need?

How is CAN made, and should you add it?

Fertilizers Europe's booklet on ammonium nitrate and CAN gives the sequence. Nitric acid and ammonia make an ammonium nitrate solution, concentrated until water is below 1 percent for prilling. Ground limestone or dolomite is added as filler, and CAN holds no more than 80 percent ammonium nitrate. The mix is prilled or granulated, then dried, cooled, screened and coated. The Order lists CAN at 25 and 26 percent nitrogen, with moisture capped at 1 percent.

The gating item is the ammonium nitrate. Under the Ammonium Nitrate Rules, 2012, manufacture and possession for sale or use need a licence from the Petroleum and Explosives Safety Organisation (PESO). Mixtures above 45 percent ammonium nitrate by weight are deemed explosive, except fertilisers from which ammonium nitrate cannot be extracted. CAN can hold up to 80 percent, so that exclusion decides the matter, and only PESO can say whether your product qualifies. Ask in writing before you order equipment.

What does an NPK fertilizer manufacturing plant cost?

Two NPCS project reports on NPK plants show the range. They differ in capacity, technology and year, so read them as a range.

Machinery is under half of total capital in both. A gap this wide at similar yearly output deserves an explanation before you rely on either figure.

Subsidy can change cash flow. The Cabinet approved ₹41,534 crore for kharif 2026 under the Nutrient Based Subsidy, covering 28 phosphatic and potassic grades, as PTI reported in April 2026. Rates are reset each season per kilogram of nutrient, so check your grade and the current season's rates with the Department of Fertilizers before counting any subsidy.

Is there demand for another NPK plant?

Buyers already take NPK in volume. Companies reported imports of 11.70 lakh tonnes in 2021-22, 27.52 lakh in 2022-23 and 22.17 lakh in 2023-24, in a Lok Sabha reply of 29 November 2024. That shows acceptance, not a gap for you. Your case rests on matching grades to local crops and beating landed import cost.

Which approvals does an NPK or CAN unit need?

• Certificate of manufacture: Required to prepare any mixture of fertilisers, with the laboratory facility the Controller specifies.
• Intimation: Every manufacturer files a Memorandum of Intimation (Form A1) with the notified authority.
• Grade standards: Meet the Order's specification for your grade, such as 15-15-15 or 17-17-17. The Order was amended several times in 2026, so check the current schedule.
• Ammonium nitrate: Licence under the 2012 Rules, as above.

What goes wrong in NPK and CAN plants?

• Caking: A blend absorbs moisture at a lower humidity than the average of its parts, and ammonium nitrate with urea is the extreme case.
• Contamination: Acids, chlorides and organic matter raise the explosion risk in ammonium nitrate products, so contaminated screenings should not be recycled.
• Emissions: The mixed acid booklet's best available technique levels are 0.2 kg of ammonia, 0.3 kg of nitrogen oxides and 0.2 kg of dust per tonne of NPK. Ask suppliers to guarantee similar figures.

What to do before you buy any equipment

1. Choose the route and write down the grades you will sell.
2. Ask PESO whether your intended CAN falls under the 2012 Rules.
3. Ask your state agriculture department for the certificate of manufacture application and its laboratory list.
4. Get granulation quotes with guaranteed capacity and emission figures.
5. Test two or three districts before building; contract manufacturing is one way. If this capital is beyond reach, compare organic fertilizer and PROM fertilizer manufacturing.

Lenders will want these numbers in a project report. An NPCS project report, from a firm consulting since 1994 with 5,000+ project reports across 40+ sectors, covers the market survey, machinery with suppliers, raw materials, manpower, project cost, working capital, break-even and a multi-year cash flow. Read how a detailed project report is structured and the options for startup funding.

Frequently asked questions

What is another name for calcium ammonium nitrate?

CAN is also called nitro-limestone or nitrochalk. It is ammonium nitrate mixed with ground limestone or dolomite. Indian standards list 25 and 26 percent nitrogen grades. Do not confuse it with calcium nitrate, which Fertilizers Europe treats as a separate material.

Can CAN be mixed with NPK fertilizer?

It can, but check the pair first. Fertilizers Europe sorts blends as compatible, limited or incompatible, and its table lists CAN as ammonium nitrate with dolomite or limestone. Its worst example is ammonium nitrate with urea, which turns wet and hard to handle. Ask your supplier for the table entry for your exact grades.

Which fertilizer should not be mixed with calcium nitrate?

Calcium nitrate should not be mixed with combustible materials, alkalis or acids, according to Fertilizers Europe's compatibility guidance. The guidance sorts each pair of materials as compatible, limited or incompatible, so check every pair in your recipe against it before finalising the blend.

What does an NPK grade such as 15-15-15 mean?

The three numbers are the percentages of nitrogen (N), phosphate (P2O5) and potash (K2O). A 15-15-15 grade holds 15 percent of each. Fertilizers Europe notes that the three normally add up to 40 to 60 percent for complex products, and the Order sets minimum contents for each named grade.