GAIL, KRIBHCO to Invest ₹13,500 Crore in Andhra Urea Plant

GAIL and KRIBHCO plan to invest ₹13,500 crore in a 1.27 MTPA urea plant at Mulapeta, Andhra Pradesh, creating around 1,300 jobs and supporting domestic fertiliser production.

GAIL (India) Limited and Krishak Bharati Cooperative Limited (KRIBHCO) are planning a joint investment of ₹13,500 crore to establish a urea manufacturing facility with an annual production capacity of 1.27 million metric tonnes in Andhra Pradesh. The proposed project, located at Mulapeta in Srikakulam district, aims to strengthen India's domestic fertiliser manufacturing capacity and reduce dependence on imported agricultural nutrients.

The two organisations will sign a Memorandum of Understanding (MoU) with the Andhra Pradesh Economic Development Board (APEDB) to advance the project. The investment will be deployed in phases, with the state government facilitating the development through financial incentives and infrastructure support.

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The proposed facility will require approximately 600-700 acres of land. The Andhra Pradesh government will provide land at a nominal cost and extend tailor-made incentives, including a fixed capital subsidy, an interest-free loan for project capital expenditure and a 100% refund of state Goods and Services Tax (GST).

The state will also facilitate essential infrastructure required for the manufacturing facility, including road connectivity, electricity, water supply and railway access up to the project site. These provisions are intended to support project execution and improve logistics for the movement of raw materials and finished fertiliser products.

The project is expected to generate approximately 1,300 employment opportunities, comprising 300-400 direct jobs and around 1,000 indirect jobs. The development is also expected to create opportunities for local suppliers, logistics operators, contractors and other businesses associated with the fertiliser manufacturing ecosystem.

The proposed investment comes as India seeks to strengthen domestic urea production amid concerns over fertiliser supply disruptions and international price fluctuations. The country imports nearly 27% of its annual urea requirement, estimated at approximately 40 million tonnes. Increasing domestic production capacity is therefore an important part of the government's efforts to improve agricultural input security and reduce exposure to global supply uncertainties.

The Centre has recently approved the National Investment Policy for Urea-2026 to encourage fresh investments in domestic urea manufacturing. The policy aims to attract private and public-sector participation and expand production capacity to address the country's long-term fertiliser requirements.

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The proposed GAIL-KRIBHCO facility aligns with this policy direction and represents a significant investment in Andhra Pradesh's industrial and agricultural infrastructure. By combining GAIL's energy-sector capabilities with KRIBHCO's fertiliser manufacturing experience, the project aims to expand domestic production and strengthen India's fertiliser supply chain.