A major public sector enterprise has recently floated multiple tenders for the supply of soluble fertilizer, clearly excluding Made in India products. Whether through the Government e-Marketplace (GeM) or direct tender routes, Indian manufacturers are increasingly being sidelined. Public sector undertakings (PSUs) are exploiting procurement loopholes in MSME and “Make in India” policies, effectively favouring foreign players.
The crux of the issue lies in compliance hurdles. Indian startups must secure multiple licenses, maintain offices, and build warehouses in every state where the PSU plans to distribute the fertilizers. In sharp contrast, foreign suppliers—especially Chinese—face almost no such burden. A simple scanned letter enables foreign agents to supply fertilizers across all states, bypassing the rigorous compliance Indian companies must endure under the Fertilizer Control Order (FCO).
The FCO: A Legacy Regulation Hindering Modern Needs
The government enacted the Fertilizer Control Order (FCO) under the Essential Commodities Act of 1955 to ensure fertilizer quality and manage its movement, especially when India depended on imports. While it played a vital role in the past, the regulatory framework has become outdated. Its dual oversight—by both central and state governments—has led to piecemeal amendments, failing to keep pace with domestic innovation and global practices.
Today, the FCO is viewed by many as a legacy of the Inspector Raj and License Raj eras. Rather than fostering innovation, it imposes stifling restrictions, especially on emerging players in the fertilizer space.
Soluble Fertilizers: The Missed Opportunity
Among the hardest hit by this archaic framework are soluble fertilizers, a key input for horticulture and high-value crops. Despite being excluded from subsidies; these fertilizers remain subject to the same rigid controls. While other sectors—like electronics, pharmaceuticals, and defence—have seen real progress under Import Substitution and Make in India, the fertilizer sector lags behind.
Indian entrepreneurs trying to innovate in this space are bogged down by excessive costs and regulatory duplication. Setting up operations in each state requires separate warehouses, licenses, and local market partnerships. This fragmented approach destroys scale advantages and competitiveness, making Indian products less viable than their imported counterparts.
Uneven Playing Field Threatens Atmanirbhar Bharat
The disparity between regulatory burdens on Indian versus foreign manufacturers is stark. Chinese manufacturers, for instance, face minimal compliance, while Indian startups deal with exhaustive requirements and oversight. This imbalance runs counter to the government’s vision of a self-reliant India.
Dr. Suhash Buddhe, Mentor at IIM Nagpur Incubation Cell, points out that India’s horticulture sector, producing over 112 million metric tons of fruits and vegetables, depends heavily on imported, non-subsidized fertilizer. Despite efforts to boost grassroots production, overregulation is pushing Indian entrepreneurs out of the game.
“One unit is monitored by as many as 32 FCO inspectors,” informed Dr. Buddhe. “Such intense scrutiny, under the guise of regulation, deters startup growth and drives up import dependence,” he added.
Industry Leaders Call for Urgent Reforms
Industry associations are voicing their concerns loudly. Jayantibhai Kumbhani, President of the Chamber for Agri Input Protection (CAIP), notes that even the pharmaceutical sector doesn’t face this level of inspection. In some districts, a single fertilizer unit is shadowed by multiple inspectors, leading to harassment and operational bottlenecks. Vijay Thakur, President of the OAMA grassroots agri-entrepreneur association in Maharashtra, echoes this sentiment, calling for immediate policy interventions.
Vinod Goyal, National Secretary of SFIA, outlines a clear path forward:
*One Nation, One License: A unified license system that allows Indian marketers to operate across all states.
*Regulatory Parity: Allow Indian companies to add new sourcing states as easily as foreign suppliers do.
*Inspector Cap: Limit FCO inspectors to two per unit to prevent harassment.
*New Legislation: Draft a new law for non-subsidized fertilizers outside the purview of the Essential Commodities Act.
Conclusion: Time for Policy to Match Vision
Despite ambitious government programs aimed at reducing imports and boosting domestic production, fertilizer policy—especially concerning soluble fertilizers—is out of sync with national goals. Without modern regulatory reforms, India risks continued dependence on foreign inputs, undermining both entrepreneurship and food security. As per the press release, the message from the grassroots is clear: To realize the vision of Atmanirbhar Bharat, the fertilizer sector needs a level playing field—and it needs it now.
