India: Sops for Coastal Shipping of Fertilizers
The policy for reimbursement of freight for movement of phosphatic and potassic (P&K) fertilizers under the Nutrient Based Subsidy (NBS) Policy and for urea has been extended to movement by coastal shipping and inland water transportation.
The subsidy that was earlier only applicable to the movement of fertilizer by rail from the plant or the port to various rake points in various districts, will now also apply to the movement of fertilizers through coastal shipping and inland waterways.
This would promote transportation of fertilizers through coastal shipping under the Ministry of Shipping’s flagship programme Sagarmala.
The Origin destination study conducted as part of the progarmme identified that the total opportunity for coastal movement of fertilizers is 9-10 MTPA by 2025, with an estimated savings of around 900 Crore to 1,000 Crore per annum.
The demand for fertilizer has grown along with the demand for food. Currently India imports 28 MMT of finished fertilizers and raw materials with Andhra Pradesh, Gujarat and Odisha being the biggest clusters.
Kakinada, Mundra and Kandla will continue to be the largest finished fertilizer importing ports, while Paradip, Kandla and Vishakhapatnam will be the largest fertilizer raw material–importing ports. Fertilizers constitute about 2 percent of the total cargo handled at ports in India.
Coastal shipping and inland waterways currently form around 7 percent of the total modal mix in India, compared to around 10–20 percent for other emerging countries like China.
