Fertilizer 3.0: The case for digitisation, decriminalisation and deregulation

The fertilizer sector, the most strategic input in Indian agriculture, is entering a new phase. The country is transitioning from a subsidy-driven ecosystem to one that will progressively function without heavy price support. At the same time, Indian agriculture is undergoing a profound transformation, marked by the rapid penetration of technology, a surge of investment, and the entry of new business models across the value chain.

This transition requires complementing innovation on the farm with innovation in policy. For India to protect its food systems, attract capital, and build self-sufficiency, the enabling environment for fertilizers must evolve at the same pace as agriculture itself.

Recent reforms show promise

The year 2025 offered encouraging signs. Reduction of GST on key fertilizer raw materials, barcode-based testing for fertilizer samples, States like maharashtra reducing Inspector numbers from 30 to 3 and the inclusion of new biostimulants into regulatory schedules are examples of reforms that helped organise and regulate the specialty agri-input ecosystem. These measures strengthened traceability, improved compliance, and brought structure to a sector long operating in fragmented regulatory spaces.

Yet, encouraging as they are, these reforms are only the beginning. Much more must be done to unlock entrepreneurship, encourage investment, and localise manufacturing. A strategic “3D Reform” of the Fertilizer Control Order (FCO) framework — Digitisation, Decriminalisation and Deregulation is now imperative.

1. Digitisation — the need of the hour

Digitisation is the most urgent requirement facing the fertilizer regulatory system. With India still dependent on imported raw materials, and China’s restrictive export policies disrupting global supply, manufacturers and importers are frequently compelled to switch sources at short notice.

However, state-level regulatory processes under the FCO are unable to keep pace. The issuance of acknowledgements to the Memorandum of Intimation (MoI) a prerequisite for source switching and import substitution often faces delays, inconsistencies, and operational bottlenecks across states.

A centralised national digital portal for MoI management, coupled with real-time monitoring of state’s performance, is long overdue. Such a platform would reduce friction, increase accountability, and enable manufacturers to respond quickly to supply shocks essential in a world where agility defines competitive advantage.

2. Decriminalisation — aligning with ease of doing business

While more than 200 industrial regulations have been decriminalised in recent years under the leadership of Hon. Minister Shri Piyush Goyal, the fertilizer domain remains largely untouched. This gap now poses a serious handicap to entrepreneurship.

The FCO must draw a clear distinction between a product that is merely deficient and one that is spurious. Treating both under the same punitive framework harms genuine enterprises, encourages over-enforcement, and discourages formalisation.

A modernised approach should treat quality deficiencies as civil or compliance matters, while criminal actions should be reserved strictly for cases involving adulteration, fraud or intentional harm. Such reform would strengthen the sector while aligning it with broader national ease-of-doing-business objectives.

3. Deregulation — enabling domestic manufacturing

Deregulation is directly linked to the competitiveness of indigenous manufacturers. In the context of shifting global supply chains, domestic producers across fertilizer categories must be placed at the top of policy priority and enabled to operate under a “One Nation, One License” framework.

Such a reform will allow Indian manufacturers to capture logistics advantages, minimise currency exposure, achieve ex works cost parity with Chinese and other external suppliers, and ultimately lower input costs for Indian farmers.

Short-term interventions can further accelerate cost optimisation, including:

Reversing accumulated GST input credits to ease working capital pressures

Investing into self-sufficiency by bringing input manufacturing under all government agriculture development funds

Expanding research funding to government investment and localise technology

These interventions will help build a resilient domestic ecosystem while reducing strategic dependence on external sources.

The author is National President, Soluble Fertiliser Industry Association

Published on January 11, 2026