FDI Inflows to Fertilizers

Abstract:

100% FDI is allowed in fertilizers under the automatic route in India. FDI Inflows to Fertilizers between August 1991 and December 2005 has been 78.22 million US dollars. FDI inflows to fertilizers are beneficial for the expansion of the fertilizer industry in India.

Fertilizers industry in India:

Fertilizers industry in India has played an important role in making the country self sufficient in the production of food grain. The first production unit of fertilizers in India was set up in Ranipet with the production capacity of 6000 MT per year. The various kinds of fertilizers produced by the industry of fertilizers in India are Urea, SSP, Complexes, and DAP. The government of India has allowed foreign direct investment in the fertilizers industry of the country.

FDI inflows to fertilizers industry in India:

Foreign Direct Investment (FDI) in fertilizers in India is allowed up to 100% under the automatic route in India. The total amount of FDI Inflows to Fertilizers industry in India was US$ 78.22 million between August 1991 and December 2005. The total percentage of FDI Inflows to Fertilizers industry in India stood at 0.26% out of the total foreign direct investment in the country during August 1991 to December 2005.

Bayer Crop of Germany was given the approval in 2003, to invest ` 74 crores in Aventis Crop Science in India involved in the production of fertilizers and pesticides. Through this investment Bayer Crop increased its stake in Aventis Crop from 67.08 % to 100%. This made Aventis Crop a fully owned subsidiary of Bayer Crop.

Advantages of FDI Inflows to Fertilizers industry in India:

The various advantages of FDI Inflows to Fertilizers industry in India are -

• Growth and expansion of fertilizer industry in India.
• Use of improved technology.
• Better quality fertilizers that are more effective for agriculture.

Last Updated on 4/23/2011