Forecast Period | 2026-2030 |
Market Size, By Volume (2024) | 16.23 Million Tonnes |
CAGR (2025-2030) | 4.85% |
Fastest Growing Segment | Fertilizers |
Largest Market | West India |
Market Size, By Volume (2030) | 21.32 Million Tonnes |
Market Overview
India Ammonia Market achieved a total
market volume of 16.23 Million Tonnes in 2024 and is expected to reach 21.32
Million Tonnes by 2030 with a CAGR of 4.85% during the forecast period. Ammonia,
a compound with the formula NH3, consists of nitrogen and hydrogen. It is a
colorless gas with a strong, unpleasant odor and is highly soluble in water,
forming ammonium hydroxide, a weak base. Its primary use is in producing
nitrogen-rich fertilizers such as urea, ammonium nitrate, and ammonium sulfate,
driven largely by agricultural demand. Ammonia is also utilized in various
industrial applications, including the manufacture of chemicals, explosives,
and refrigerants.
India is a significant player in the
global ammonia market, with several production facilities operated by companies
such as Rashtriya Chemicals and Fertilizers (RCF) and National Fertilizers
Limited (NFL). These facilities meet a considerable portion of the country's
ammonia requirements domestically. The sector is subject to government
regulation through policies related to fertilizer subsidies, environmental
standards, and trade tariffs, all of which influence market conditions.
Policies aimed at increasing domestic production or managing imports can impact
market dynamics. Stringent regulations on emissions and environmental impact
play a crucial role in shaping operational costs and practices within the
ammonia production sector. Infrastructure issues, including those related to
transportation and storage, can also affect the efficiency of ammonia
distribution and availability.
The Indian ammonia market is positioned
for growth, driven by robust demand from both agricultural and industrial
sectors. Technological advancements, particularly those focusing on improving
production efficiency and reducing environmental impact, are expected to
positively influence market trends. Additionally, ongoing investments in
infrastructure and regulatory adjustments are likely to enhance market
stability and growth prospects.
Key Market Drivers
Government Policies and Incentives
The
Indian government offers significant subsidies on fertilizers, which reduces
costs for farmers. Since ammonia is a crucial raw material for nitrogenous
fertilizers, these subsidies directly increase ammonia demand by making
fertilizers more affordable. Programs such as the Pradhan Mantri Krishi Sinchai
Yojana and the National Food Security Mission enhance agricultural productivity
and fertilizer usage, thus further driving ammonia demand. The fertilizer sector received subsidies
of USD 16 Billion, USD 17 Billion, and USD 18 Billion in the three most
recent budgets, beginning with the 2020-21 fiscal year.
The
government's commitment to reducing carbon emissions and fostering sustainable
practices impacts the ammonia market by encouraging the development and
adoption of greener technologies. In 2024, the government introduced a new
incentive scheme for green hydrogen and green ammonia production, aimed at
demand aggregation. This is the first incentive program specifically for green
ammonia under the National Green Hydrogen Mission. There is growing interest in
green ammonia, which is produced using renewable energy or more sustainable
methods. Government incentives and funding for research and development in
green ammonia technology are expected to drive market growth and innovation. In
April 2024, the Indian Farmers Fertilizer Cooperative Limited (IFFCO) and ACME
Cleantech Solutions Private Limited signed a Memorandum of Understanding (MoU),
with ACME supplying IFFCO with 200,000 metric tons of ammonia produced from
renewable energy. This represents a significant milestone in India’s transition
to cleaner energy and lower carbon emissions.
Initiatives
promoting environmentally friendly and sustainable agricultural practices
include the development of fertilizers that reduce environmental impact,
driving demand for green ammonia as part of advanced fertilizer formulations.
Increased public awareness of environmental issues and sustainability pressures
companies to adopt greener practices, influencing the ammonia market by
promoting more sustainable production methods and products. In July 2024, KBR
announced that OCIOR Energy has selected its green ammonia technology, K-GreeN,
for a facility in Gopalpur, Odisha. This marks KBR’s 10th globally licensed
green ammonia plant and the first in India. Under this agreement, KBR will
provide OCIOR with technology licensing, engineering design, equipment, and
catalysts for a facility capable of producing 600 metric tons per day of green
ammonia, while also assisting in optimizing production costs.
Government
policies and sustainability factors are pivotal drivers of the ammonia market
in India. Subsidies and development programs that support fertilizer use,
combined with initiatives that promote environmental sustainability and green
technology, shape the market dynamics. As India focuses on boosting
agricultural productivity and addressing environmental challenges, these
policies will further propel the growth of the ammonia market.
Growing Usage as a Refrigerant
India's
food processing industry is experiencing rapid expansion, fueled by rising
domestic consumption and increased export opportunities. Ammonia plays a
critical role in industrial refrigeration systems for chilling and freezing
food products, essential for maintaining supply chain efficiency and product
quality. The escalating demand for cold storage, especially in the dairy, meat,
and pharmaceutical sectors, is driving the need for ammonia-based refrigeration
solutions. The Pradhan Mantri Kisan Sampada Yojana has been extended until
March 2026 with a funding allocation of INR 4,600 crore. Under this scheme,
projects such as Integrated Cold Chain and Value Addition Infrastructure will
be implemented. Ammonia refrigeration systems are highly efficient compared to
other refrigerants, leading to reduced energy consumption and operational
costs, making them the preferred choice for large-scale industrial use. Their
superior heat transfer efficiency lowers overall cooling costs for businesses.
The
study titled “Retaining Natural Refrigerants in Seafood Processing Industries
in India,” conducted by a team including Arun B. Sa, Sumit Kumar, and Kristina
Norne, was supported by the Indo-Norwegian Future Refrigeration India (INDEE+)
project. Funded by the Norwegian Ministry of Foreign Affairs, INDEE+ aims to
facilitate the transition to more eco-friendly refrigeration technologies in
India. The study found that an ammonia (NH3/R717)/CO2 (R744) cascade
refrigeration system has an annual coefficient of performance (COP) 35% higher
than an R404A system in 2024.
Ammonia's
low global warming potential (GWP) and lack of ozone depletion align with
global and national environmental goals, making it an attractive option as
industries and governments work to reduce carbon footprints. In line with this,
India ratified the Kigali Amendment in 2021 and introduced the India Cooling
Action Plan (ICAP) in 2019. This plan sets national targets for improving
cooling efficiency and shifting to alternative refrigerants, aiming to cut
greenhouse gas emissions using natural refrigerants and noble gases for
ultra-low-temperature applications.
NAS
Fisheries, part of the Kochi project, began utilizing an ammonia (R717)/CO2
cascade refrigeration system in December 2023 to freeze-dry shrimp and
cuttlefish at temperatures as low as −40°C (−40°F). Despite higher initial
setup costs, ammonia systems typically offer long-term savings due to their
energy efficiency and lower operational costs, which promotes their adoption in
industrial applications. As India's industrial sector grows and evolves, the
demand for ammonia-based refrigeration systems is expected to rise, supporting
market expansion.
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Key Market Challenges
High Production Costs
Ammonia
production is heavily dependent on natural gas, which serves both as a
feedstock and an energy source. Variations in natural gas prices can result in
increased production costs. Energy prices in India are influenced by global
market trends and domestic supply issues, impacting ammonia production
expenses. Establishing ammonia production facilities requires a significant
capital investment in infrastructure, including reactors, storage tanks, and
safety systems. These substantial initial costs can be a barrier for new
entrants or those expanding their operations.
Investing
in advanced production technologies that improve efficiency and reduce
emissions also entails high costs. Although these technologies can offer
long-term savings, the initial financial outlay is considerable. Adhering to
stringent environmental regulations and standards adds further expenses.
Investments in pollution control measures and waste management are costly. Ammonia
production requires meeting strict safety standards, including advanced safety
systems and regular inspections, which further increases costs. The hazardous
nature of ammonia necessitates specialized transportation and handling, leading
to higher logistics expenses. Safe transportation and storage infrastructure,
while essential, are also costly. Proper storage facilities for ammonia,
equipped with necessary safety measures, contribute to elevated production and
operational costs. Many ammonia producers, especially in the fertilizer sector,
depend on government subsidies to mitigate production costs. Any changes in
subsidy policies or reductions in government support can significantly impact
production costs and market viability.
Supply Chain Disruptions
Ammonia
necessitates secure and specialized storage facilities due to its volatile
nature. Inadequate storage infrastructure can result in supply interruptions
and increased costs. Proper handling and storage of ammonia requires stringent
safety protocols; any lapses in these protocols can lead to operational
disruptions and heightened regulatory scrutiny. For example, during a gas leak
incident at the Coromandel Fertilizer Plant in Ennore in December 2024, around
67.63 tonnes of ammonia were released over 15 minutes, and none of the 19
ammonia sensors at the facility detected the leak. Insufficient infrastructure
for handling and distributing ammonia including pipelines, storage facilities,
and transportation networks can cause inefficiencies and bottlenecks in the
supply chain. Additionally, fluctuations in trade policies, tariffs, and
international agreements can impact the import and export of raw materials and
finished ammonia products, with trade disputes or sanctions potentially
worsening supply chain disruptions.
Supply
chain issues can lead to production delays due to shortages of raw materials or
interruptions in the delivery of essential components and equipment. Delays in
receiving spare parts or maintenance supplies can result in extended downtime
or decreased operational efficiency. These disruptions often lead to higher
costs for raw materials and transportation, which are typically passed on to
consumers, affecting the overall pricing and competitiveness of ammonia
products. Ammonia production heavily relies on natural gas, both as a feedstock
and an energy source. Disruptions in the supply of natural gas, whether due to
geopolitical tensions like the Russia-Ukraine war, extraction problems, or
domestic supply constraints, can directly affect ammonia production.
Additionally, supply chain problems can impede the timely implementation of
safety and environmental regulations, leading to compliance challenges and
potential penalties.
Key Market Trends
Shift Towards Sustainable
Practices
There
is a growing focus on producing ammonia using renewable energy sources. Green
ammonia production involves generating hydrogen from renewable sources, such as
wind or solar power, instead of natural gas, which represents a more
sustainable approach. The Indian government is actively fostering this
transition through policies that support cleaner technologies and environmental
stewardship. In March 2024, the state of Odisha in eastern India approved two
investment proposals for green ammonia projects totaling USD 2.27 billion.
Greenko Group is developing one of the world’s largest green ammonia production
facilities, starting with an annual production capacity of one million tonnes,
and expanding to five million tonnes per year by 2030. Additionally, state-run
SJVN’s green energy division, SGEL, has agreed to provide 4.5 GW of renewable
energy to Greenko Group’s AM Green Ammonia Holdings for its new production
facilities, as per an agreement signed in July 2024.
Many
companies are setting ambitious goals to achieve carbon neutrality or
significantly cut their carbon emissions. This includes transitioning to more
sustainable production methods and employing carbon offset strategies. For
instance, Adani Power Ltd (APL) announced plans to use green ammonia alongside
conventional coal to fuel the 330 MW boiler at its Mundra plant in Gujarat in
2023, with green ammonia comprising up to 20% of the total fuel mix. Businesses
are increasingly integrating sustainability into their operations by optimizing
resource use, reducing energy consumption, and improving overall operational
efficiency. Industry associations and organizations are promoting best
practices for sustainability, offering guidance, and encouraging collaboration
to drive sector-wide changes.
In
April 2024, Reliance Industries Ltd (RIL), Larsen & Toubro (L&T),
Greenko Group, and Welspun New Energy announced plans to establish green
hydrogen and ammonia production facilities at Deendayal Port Authority (DPA) in
Kandla, Gujarat. This joint venture is expected to attract an investment of up
to INR1 lakh crore. Significant investments are also being made in R&D to
advance technologies that enhance the sustainability of ammonia production. For
example, Malaysian energy giant Petronas and Singapore’s sovereign wealth fund
GIC are investing in a project being developed by AM Green to produce five million tonnes of green ammonia
annually in India by 2030. Efforts to develop more sustainable supply chains
are underway, including the adoption of energy-efficient transportation methods
and the creation of infrastructure to support environmentally friendly
logistics. The shift towards sustainable practices in the Indian ammonia market
underscores a growing commitment to environmental responsibility and
efficiency, driven by government policies, technological advancements, and
market demand. This trend is influencing all facets of ammonia production and
use, from production methods to supply chain management.
Segmental Insights
Form Insights
Based
on Form, the Anhydrous Ammonia emerged as the dominating
segment in the Indian market for Ammonia in 2024. Anhydrous ammonia is a vital raw
material in the manufacturing of nitrogen fertilizers such as urea, ammonium
nitrate, and ammonium sulfate. These fertilizers are essential for improving
soil fertility and increasing crop yields, making anhydrous ammonia crucial for
the agricultural sector, which significantly drives ammonia demand in India. It
also serves as a feedstock for various chemical processes, including the
production of industrial chemicals, explosives, and other specialty products. The
logistics for anhydrous ammonia are well-optimized due to its extensive use and
the established network of storage and transportation facilities, reinforcing
its market dominance. Economically, anhydrous ammonia is more cost-effective
compared to other ammonia forms because of its higher nitrogen content and
reduced handling costs in bulk applications. Its concentrated nature allows for
a high nitrogen yield per unit volume, making it particularly advantageous for
large-scale uses. Beyond fertilizers, anhydrous ammonia is utilized in diverse
applications such as water treatment, industrial cleaning, and as a raw
material in various chemical manufacturing processes. This versatility further
strengthens its position in the market.
Application Insights
Based
on Application, Fertilizers emerged as the fastest growing segment in the Indian
market for Ammonia during the forecast period. India’s agriculture sector plays
a vital role in its economy, with ongoing efforts to improve crop yields and
soil fertility. Ammonia is a crucial component of nitrogen fertilizers like
urea, which significantly enhance agricultural productivity. Government
initiatives and subsidies boost fertilizer usage, thereby increasing ammonia
demand. There is substantial investment in expanding and upgrading fertilizer
production facilities to meet rising food demand and improve agricultural
efficiency. The shift towards green ammonia production, which utilizes
renewable energy sources, aims to address fertilizer needs sustainably. In June
2024, the Ministry of New and Renewable Energy (MNRE) updated the Strategic
Interventions for Green Hydrogen Transition (SIGHT) Programme to increase the
bidding capacity for green ammonia production to 750,000 MT annually. Additionally,
in April 2024, Japan’s JERA and India-based ReNew Energy Global agreed to
develop a green ammonia production project in India. Investment in the
fertilizer sector is expected to rise due to domestic demand and government
policies focused on food security. Technological advancements are further
enhancing the efficiency and sustainability of fertilizer production, driving
the growth of ammonia use in this sector.
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Regional Insights
Based
on Region, West India emerged as the dominant region in the Indian market for Ammonia
in 2024. This is driven by its advanced industrial infrastructure, high
concentration of fertilizer production, strategic port locations, supportive
policies, and substantial agricultural demand. Regions like Gujarat and
Maharashtra in West India have significant agricultural activities that require
large quantities of fertilizers, thus driving the demand for ammonia, a key
ingredient in these fertilizers. Gujarat, in particular, hosts some of India's
largest fertilizer plants, which are major consumers of ammonia for producing
urea and other nitrogen-based fertilizers. In May 2024, Aegis Logistics
announced plans to expand its ammonia storage capacity in Gujarat by adding
approximately 36,000 metric tons to its specialized terminal. The region has
also seen substantial investments in technology and innovation, improving
efficiency and production capabilities in the chemical and fertilizer sectors. Inox
Air Products signed a memorandum of understanding with the Maharashtra
government in January 2024 to establish the state's first green ammonia plant,
with a capacity of 500,000 MTPA and a planned investment of USD 3 billion, set
to be operational within 3-5 years. West India’s strategic advantages are
further supported by its well-developed port infrastructure, including the
Kandla and Mundra ports in Gujarat, which facilitate the import and export of
ammonia and other chemicals, reinforcing its prominent position in the ammonia
market.
Recent Development
- In
June 2024, Sojitz Corporation, Kyushu Electric Power Co., and Sembcorp Green
Hydrogen Pte. Ltd., a fully owned subsidiary of Sembcorp Industries, signed a
term sheet for the supply of green ammonia produced in India to a Japanese
buyer. By providing cost-effective green ammonia, Sojitz aims to advance the
adoption of green energy and support Japan's efforts toward decarbonization.
- In
May 2024, Tata Steel Special Economic Zone Limited (TSSEZL) and HHP Five
Private Limited (Hygenco) signed a memorandum of understanding (MoU) to develop
a green hydrogen and green ammonia project at TSSEZL's Gopalpur Industrial Park
(GIP) in Ganjam district, Odisha. As part of the agreement, Hygenco will secure
land in Ganjam district to set up its green hydrogen, green ammonia, and
derivatives production facility.
- In
March 2024, Haifa Group entered into a collaborative agreement with Deepak
Fertilisers to conduct business in India. This partnership aims to enhance
innovation and sustainability in plant nutrition and agriculture across the
country. The strategic alliance is expected to offer Indian farmers advanced
plant nutrition solutions and effective Nutrigation practices, thereby
improving crop yields and quality while emphasizing resource conservation and
minimizing environmental impact.
- In
February 2024, Equinor and Deepak Fertilisers finalized a 15-year agreement for
the supply of liquefied natural gas (LNG), with deliveries set to commence in
2026. Deepak Fertilisers will use the LNG as feedstock for ammonia production
at its newly established facility for fertilizers and petrochemicals. The
agreement includes an annual supply of approximately 0.65 million tons of LNG
over the 15-year period starting in 2026.
Key Market Players
- Indian
Farmers Fertiliser Cooperative Limited
- Gujarat
State Fertilizer & Chemicals Limited
- Madras
Fertilizers Limited
- Trilok
Chemicals Pvt Ltd
- Deepak
Fertilisers And Petrochemicals Corporation Limited
- Yara
Fertilisers India Pvt. Ltd.
- Tata
Chemicals Limited
- Brahmaputra
Valley Fertlizers Corporation Limited
- Mysore
Ammonia Pvt. Ltd.
- Fertilisers
and Chemicals Travancore Limited
|
By
Form
|
By
Sales Channel
|
By
Application
|
By Region
|
- Anhydrous Ammonia
- Aqueous Ammonia
|
- Direct Sales Channel
- Indirect Sales
Channel
|
- Fertilizers
- Explosives
- Others
|
- West India
- North India
- South India
- East India
|
Report Scope:
In this report, the India Ammonia Market has been
segmented into the following categories, in addition to the industry trends
which have also been detailed below:
- India Ammonia Market, By Form:
o Anhydrous Ammonia
o Aqueous Ammonia
- India Ammonia Market, By Sales Channel:
o Direct Sales Channel
o Indirect Sales Channel
·
India Ammonia
Market, By Application:
o Fertilizers
o Explosives
o Others
- India Ammonia Market, By Region:
o West India
o North India
o South India
o East India
Competitive Landscape
Company Profiles: Detailed analysis of the major companies presents in the India Ammonia
Market.
Available Customizations:
India Ammonia Market report with the given market
data, Tech Sci Research offers customizations according to a company's specific
needs. The following customization options are available for the report:
Company Information
- Detailed analysis and profiling of additional
market players (up to five).
India Ammonia Market is an upcoming report to be
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