|
Forecast
Period
|
2026-2030
|
|
Market
Size, By Volume (2024)
|
822
Thousand Tonnes
|
|
CAGR
(2025-2030)
|
3.48%
|
|
Fastest
Growing Segment
|
Agriculture
|
|
Largest
Market
|
North
India
|
|
Market
Size, By Volume (2030)
|
997.68
Thousand Tonnes
|
Market Overview
India
Ammonium Nitrate Market achieved the
total volume of 822 Thousand Tonnes in 2024 and is expected
to reach 997.68 Thousand Tonnes by 2030 with a CAGR of 3.48%
during the forecast period.
The ammonium nitrate market
in India is witnessing robust growth, driven by rising demand from the
agricultural, mining, and industrial sectors. As a key nitrogen fertilizer,
ammonium nitrate plays an essential role in enhancing crop yields. The significant
agricultural base in India results in high demand for nitrogen-based
fertilizers, further intensified by the need for increased agricultural
productivity amid population growth. In addition to its use in agriculture,
ammonium nitrate serves as an explosive in the mining industry, with the
expansion of mining activities also boosting market demand. Government
initiatives focused on enhancing agricultural productivity and sustainability
are expected to further stimulate this demand.
Major
manufacturers, both domestic and international, are ramping up production
capacities to meet the increasing needs of the market. Current investments in
domestic ammonium nitrate capacity are estimated at around USD 833.82- 893.38 Million, with an additional Rs 595.59
Million earmarked for ongoing plant constructions. While India has four
producers of High Density Ammonium Nitrate (HDAN), domestic production is
insufficient to satisfy the requirements for various explosives used in coal
and non-coal mining, as well as infrastructure projects. Consequently,
explosive manufacturers often blend domestic and imported ammonium nitrate.
The
availability of essential raw materials, such as ammonia and nitric acid, is
crucial for production, with both domestic sources and imports affecting supply
stability. The production and sale of ammonium nitrate are subject to stringent
regulations due to safety concerns related to its explosive properties, which
can impact market dynamics. Innovations in production technology are enhancing
efficiency and lowering costs, potentially increasing competition in the
market.
There
is a rising trend toward using controlled-release fertilizers, including
ammonium nitrate, to minimize environmental impact while maximizing
agricultural output. Demand is particularly strong in states with intensive
agricultural practices, such as Punjab, Haryana, and Maharashtra, as well as in
regions with active mining operations.
The
ammonium nitrate market in India is positioned for steady growth, driven by
agricultural and industrial demands. However, it must navigate regulatory
challenges and price volatility to sustain this growth. As the industry
evolves, an emphasis on sustainability and technological advancements will be
critical in shaping its future.
Key Market Drivers
Rising Agricultural Demand
Rising
demand from the agricultural sector is a key driver for the ammonium nitrate
market in India. As the population continues to grow, the need for food
production intensifies. In April 2024, the World Bank indicated that India
has overtaken China last year as the world's most populous nation, reaching 1.4
billion people. The country is projected to achieve a growth rate of 7.5% in
the fiscal year ending in March, up from 7% in the previous year. This
growth underscores the urgency for enhanced food production, pushing farmers to
improve yields, often using nitrogen fertilizers like ammonium nitrate.
With
increasing incomes, dietary patterns in India are shifting toward more
protein-rich foods, such as pulses, fruits, and vegetables, which demand more
intensive cultivation practices. Consequently, there is a rising demand for
cash crops and vegetables, which require higher nitrogen levels for optimal
growth, leading to greater reliance on ammonium nitrate.
The
Indian government supports this trend through various fertilizer subsidy
programs, making them more affordable for farmers. For instance, the finance
minister has allocated USD 18.10 Billion for agriculture and allied sectors in
FY 25, representing 3.1% of the total expenditure of USD 574.10 Billion.
Additionally, USD 19.53 Billion has been set aside for fertilizer subsidies in
the upcoming financial year, promoting the use of ammonium nitrate.
Government
initiatives aimed at enhancing agricultural productivity, such as the Pradhan
Mantri Krishi Sinchai Yojana (PMKSY) and the National Bio-Fertilizer Scheme
(NBS), further encourage the adoption of chemical fertilizers. Farmers are diversifying their crop
choices to include more high-value and nutrient-demanding varieties,
necessitating targeted fertilization strategies that prominently feature
ammonium nitrate.
As
sustainable agricultural practices gain traction, farmers are implementing best
practices that optimize fertilizer use. Ammonium nitrate is preferred for its
rapid-release nitrogen, facilitating easier nutrient uptake by plants.
Furthermore, farmers are increasingly integrating organic and chemical
fertilizers, with ammonium nitrate complementing organic practices to enhance
soil health and productivity.
Agricultural
extension services play a crucial role in educating farmers about the
advantages of ammonium nitrate, and initiatives that promote best practices in
fertilizer use are enhancing adoption rates. By addressing the growing
population's needs, evolving dietary preferences, and supportive government
initiatives, the ammonium nitrate market is well-positioned for growth within
India’s agricultural landscape.
Rising Industrial Applications
Ammonium
nitrate is a key component in the production of blasting agents, especially
within the mining and construction industries, due to its effectiveness in
controlled explosions. India's abundant mineral resources drive significant
demand for ammonium nitrate-based explosives, as the country produces 95
different minerals, including fuel, metallic, non-metallic, atomic, and minor
minerals. According to the India Economic Survey, the mining sector grew
by 7.5% in FY24, with substantial increases in iron ore and limestone
production. As mining operations expand, the demand for efficient blasting
agents rises.
Furthermore,
large-scale infrastructure projects such as road construction, dam projects,
and urban development also contribute to the heightened need for explosives,
thus boosting the demand for ammonium nitrate. Additionally, beyond its use in
explosives, ammonium nitrate is utilized in various chemical manufacturing
processes, including the production of nitric acid and other nitrogen-based
chemicals, broadening its application across multiple industrial sectors.
Government
initiatives like the National Infrastructure Pipeline and Smart Cities Mission
are driving investments in infrastructure, which directly increases the consumption of ammonium
nitrate in construction activities. The implementation of stringent safety
regulations for handling and storing explosives enhances the industry's
willingness to utilize ammonium nitrate, given its manageable nature under
controlled conditions. A heightened focus on worker training and safety
standards promotes the responsible use of ammonium nitrate, encouraging its
acceptance in the industry.
Rapid
urbanization in India leads to increased construction and industrial
activities, which directly correlates with higher consumption of ammonium
nitrate. As industries continue to grow and innovate, ammonium nitrate is
poised to play a vital role in supporting economic growth and industrial
development in the region.
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Key Market Challenges
Rising imports
The
influx of imported ammonium nitrate into the Indian market heightens
competition for local manufacturers. Imported products are often priced lower
due to economies of scale and lower production costs in other countries,
forcing domestic producers to reduce their prices to stay competitive. According
to the Indian Ammonium Nitrate Manufacturers Association (IANMA), uncontrolled
imports have caused capacity utilization to decline from 86% in FY19 to 75%
during the period of April to December 2023. Notably, nearly all imported
ammonium nitrate over the past 18 months has come from Russia. During the
period of April to November 2023, imports surged by 113%, rising to 305,000
tonnes compared to 143,000 tonnes in the same timeframe the previous year.
This
surge in imports can result in market saturation, where supply surpasses
demand, leading to depressed prices that make it challenging for domestic
producers to sell their products profitably. Additionally, global ammonium
nitrate prices are subject to fluctuations due to factors such as changes in
oil prices, geopolitical tensions, and natural disasters affecting production
in exporting countries. Such volatility can create unpredictable pricing in the
Indian market, complicating local producers' ability to effectively plan and
price their offerings.
Heavy
reliance on imported ammonium nitrate also exposes the Indian market to various
supply chain risks. Issues like shipping delays, trade disputes, or disruptions
in exporting countries such as strikes or natural disasters can lead to
shortages, affecting availability. As a result, Indian manufacturers become
increasingly vulnerable to global market dynamics. Changes in international
trade policies can significantly impact the cost and availability of ammonium
nitrate imports; for instance, increased tariffs or stringent regulations could
drive up prices and lead to shortages.
With
rising imports and market saturation, potential investors may hesitate to
invest in new production facilities or expand existing ones, hindering the
growth of the domestic ammonium nitrate industry and its competitiveness. To
navigate these challenges, stakeholders in the ammonium nitrate sector must
enhance production efficiencies, improve product quality, and explore new
market strategies to maintain their position in an increasingly competitive
environment.
Regulatory Compliance
Ammonium
nitrate is designated as a hazardous material, resulting in stringent safety
regulations governing its production, storage, handling, and transportation.
Complying with these regulations often necessitates considerable investments in
safety equipment and training. Manufacturers are also required to meet
environmental regulations concerning emissions, waste disposal, and the
potential environmental effects of ammonium nitrate production, which can be
both costly and time-consuming.
The
process of acquiring the necessary permits and licenses can be complex,
involving multiple government agencies, and any delays in approval may disrupt
production schedules and increase operational expenses. Adhering to safety and
environmental standards can significantly elevate operational costs, including
expenses for safety training, compliance audits, and technological investments
needed to meet regulatory requirements. These higher costs can squeeze profit
margins, particularly in a competitive market already pressured by low-priced
imports.
Non-compliance
with regulations poses risks such as substantial penalties, fines, or even
operational shutdowns, adding uncertainty that can affect manufacturers'
financial stability. The transportation of ammonium nitrate is regulated to
ensure safety, but compliance can complicate logistics, raise transportation
costs, and restrict distribution options. Additionally, companies must follow
strict storage guidelines that may necessitate specialized facilities, limiting
operational flexibility and increasing capital expenditures.
Stringent
regulatory requirements can create significant barriers for new entrants in the
ammonium nitrate market, potentially stifling competition and innovation and
affecting overall market dynamics. To succeed in this challenging environment,
stakeholders must implement robust compliance strategies, invest in training
and safety initiatives, and remain adaptable to regulatory changes.
Key Market Trends
Rising focus on Coal Gasification
The
increasing emphasis on coal gasification is having a substantial impact on the
ammonium nitrate market in India. Coal gasification offers an alternative
method for producing ammonia, which is essential for ammonium nitrate
production. As the industry shifts towards gasification for ammonia production,
it can enhance the supply chain for ammonium nitrate manufacturers. Utilizing
India's rich coal reserves for ammonia production through gasification reduces
reliance on imported ammonia, stabilizing both prices and supply.
The
Indian government is actively promoting coal gasification as part of its energy
security and diversification initiatives. Supportive policies and incentives
are encouraging investments in gasification technologies that benefit the
ammonium nitrate sector. For example, in January 2024, the Indian government
approved incentives worth USD 1.01 Billion for coal gasification projects. This
thermo-chemical process converts coal into synthesis gas (syngas), which could
potentially replace imports valued at USD 15.48 Billion. The process can also
produce methanol for blending with petrol, Di-Methyl Ether (DME) for LPG,
ammonia for urea and ammonium nitrate production, and facilitate steel making
through gas-based direct reduced iron, reducing the need for imported coking coal
in blast furnaces, as well as producing synthetic natural gas (SNG).
Coal
gasification is projected to be a more cost-effective method for ammonia
synthesis compared to traditional natural gas reforming. Lower production costs
could lead to reduced prices for ammonium nitrate. Additionally, large-scale
coal gasification projects can achieve significant economies of scale, further
driving down costs and improving profitability for ammonium nitrate producers.
Innovations
in coal gasification technology are focused on minimizing emissions and
environmental impacts. Processes like integrated gasification combined cycle
(IGCC) contribute to more sustainable ammonia production. Furthermore,
integrating carbon capture and storage (CCS) technologies with coal
gasification can help lower greenhouse gas emissions, aligning ammonium nitrate
production with global sustainability objectives.
By
providing a cost-effective and sustainable source of ammonia, this trend not
only supports the growth of the ammonium nitrate industry but also aligns with
broader environmental and energy goals. As technology continues to advance and
government support strengthens, coal gasification is expected to become a key
component of ammonia production in India, significantly shaping market
dynamics.
Segmental Insights
Solids Insights
Based
on Solids, the High Density Ammonium Nitrate emerged as
the dominating segment in the Indian market for Ammonium Nitrate during the
forecast period. High-density
ammonium nitrate (HDAN) has a higher concentration of ammonium nitrate per unit
volume compared to low-density options, enabling farmers and industrial users
to achieve desired outcomes with less product, making it a more efficient
choice. HDAN is extensively utilized in the mining and construction sectors for
producing explosives, as its density allows for better energy release and
stability during detonation, making it ideal for controlled blasting
operations.
Due
to its higher density, HDAN requires less volume to deliver the same nitrogen
content, resulting in reduced transportation and storage costs since more
products can be shipped at once. Its compact form also facilitates easier
handling and storage, enhancing operational efficiencies for manufacturers and
end-users. HDAN is more stable than low-density ammonium nitrate, which is
critical for safe handling in industrial environments. It complies with
stringent safety regulations for both explosives and fertilizers, making it a
trustworthy choice for industries that prioritize safety. While
HDAN is particularly favored in the explosives market, it is also applicable in
certain agricultural contexts, especially where high nitrogen levels are
necessary for specific crops. It can be readily blended with other fertilizers
or additives, allowing for customized nutrient management strategies in
agriculture. As industries and farmers aim to optimize inputs for improved
yields and cost savings, the demand for high-density products is expected to
grow.
End Use Insights
Based
on End Use, Agriculture emerged as the fastest growing segment in the Indian
market for Ammonium Nitrate in 2024. India's expanding population is increasing
the demand for food, which necessitates a boost in agricultural productivity
and a greater reliance on effective fertilizers like ammonium nitrate. This
high-nitrogen fertilizer is crucial for plant growth due to its quick and
efficient nitrogen delivery, making it highly desirable for improving crop
yields. To facilitate this, the Indian government has introduced various
subsidies and support programs that enhance the accessibility and affordability
of ammonium nitrate for farmers. Moreover, the adoption of modern farming
practices, such as precision agriculture, is promoting more efficient
fertilizer use, with farmers increasingly turning to ammonium nitrate to
optimize nutrient delivery and enhance crop health.
Growing
awareness of soil health and fertility management is leading farmers to seek
out effective fertilizers. Ammonium nitrate is particularly recognized for its
ability to increase soil nitrogen levels, making it a preferred choice. Its
versatility allows it to be used across a wide range of crops, including
cereals, pulses, and vegetables, expanding its market potential within
agriculture. As climate change impacts agricultural practices, farmers are
looking for fertilizers that enhance resilience and adaptability, further
driving the demand for ammonium nitrate. With these factors at play, the demand
for ammonium nitrate in agriculture is anticipated to continue rising.
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Regional Insights
Based
on Region, North India emerged as the dominant region in the Indian market for Ammonium
Nitrate in 2024. North India is recognized for its varied cropping patterns,
particularly the high-yield crops from the Green Revolution, such as wheat and
rice. These crops require substantial fertilization to boost productivity, with
ammonium nitrate being a preferred choice due to its rapid nitrogen
availability. Farmers in this region strive for maximum output, which drives
extensive use of chemical fertilizers to achieve their objectives.
Soil
deficiencies in nitrogen in parts of North India make ammonium nitrate a vital
ingredient in fertilizer formulations, as it helps restore essential soil
nutrients, enhancing crop performance. The well-developed irrigation systems in
states like Punjab and Haryana facilitate multiple cropping cycles each year,
further increasing the demand for fertilizers, including ammonium nitrate. Additionally,
the Indian government frequently provides subsidies for fertilizers, including
ammonium nitrate, making them more financially accessible for farmers.
Historical policies in the region have strongly supported the use of chemical
fertilizers. North India is also home to several fertilizer production
facilities, which help reduce transportation costs and ensure a consistent
supply of ammonium nitrate to local markets.
Farmers
in North India have a long-standing tradition of using ammonium nitrate,
fostering established practices and trust in its effectiveness. This historical
reliance diminishes the likelihood of switching to alternative fertilizers.
Given the competitive nature of agricultural markets, the robust agrarian
economy in North India sees farmers willing to invest in fertilizers to
optimize yields. These factors position North India as the leading region in
the ammonium nitrate market.
Recent Development
- In
August 2024, Gujarat Narmada Valley Fertilizers & Chemicals Limited (GNFC)
announced plans to invest in the establishment of a 600 MTPD (200,000 MTPA)
production facility for weak nitric acid. This investment will increase GNFC's
weak nitric acid capacity by approximately 57%. Additionally, the company has
received approval to invest in Ammonium Nitrate as a downstream product. The
Board has also sanctioned the appointment of Kearney as the Strategic
Management Consultant (SMC) to help define the company's strategic direction.
- In
February 2024, Coal India Limited (CIL) and Bharat Heavy Electricals Limited
(BHEL) signed a joint venture agreement (JVA) to establish an ammonium nitrate
plant using surface coal gasification (SCG) technology. The plant, set to be
located in the Lakhanpur area of Mahanadi Coalfields Limited in Odisha, aims
for an initial production capacity of 2,000 tons of ammonium nitrate per day,
with an annual production target of 660,000 tons, requiring 1.3 million tons of
coal, which will be sourced from CIL. BHEL will provide its indigenously
developed pressurized fluidized bed gasification (PFBG) technology for this
initiative.
- In
April 2023, Chambal Fertilisers revealed its plans to build a greenfield
technical ammonium nitrate (TAN) plant with a capacity of 240,000 tonnes per
year at its Gadepan complex in northwestern Rajasthan. The company is also
planning to establish a 210,000 tonne/year weak nitric acid (WNA) line, with a
total estimated investment of USD 201 Million. Both facilities are expected to
commence operations by October 2025, with the WNA unit providing feedstock for
the TAN plant.
- In
February 2023, Rashtriya Chemicals and Fertilizers Ltd. selected Casale’s
NitroPIPE technology for a new 425 MTPD ammonium nitrate melt facility in
Trombay, India. The project will be executed on a Lump Sum Turn Key (LSTK)
basis by Larsen & Toubro's Energy Hydrocarbon Division. Casale will supply
the license, process design package, proprietary equipment, and review key
engineering documents, while L&T will serve as the primary EPC contractor.
Key Market Players
- Deepak
Fertilisers and Petrochemicals Corporation Limited
- Mahadhan
AgriTech Limited
- Gujarat
Narmada Valley Fertilizers & Chemicals Limited
- Rashtriya
Chemicals and Fertilizers Limited
- National
Fertilizers Limited
- Yara
Fertilisers India Pvt. Ltd.
- Chambal
Fertilisers and Chemicals Ltd.
- Vijay
Gas Industry Pvt. Ltd.
- Machhar
Industries Limited
|
By
Grade
|
By
Solids
|
By
End Use
|
By Region
|
- Agriculture
- Industrial
- Food
- Others
|
- High Density
Ammonium Nitrate
- Low Density
Ammonium Nitrate
|
- Agriculture
- Mining
- Pharmaceutical
- Plastics
- Pulp & Paper
- Others
|
- West India
- North India
- South India
- East India
|
Report Scope:
In this report, the India Ammonium Nitrate Market
has been segmented into the following categories, in addition to the industry
trends which have also been detailed below:
- India Ammonium Nitrate Market, By Grade:
o Agriculture
o Industrial
o Food
o Others
- India Ammonium Nitrate Market, By Solids:
o High Density Ammonium Nitrate
o Low Density Ammonium Nitrate
·
India Ammonium
Nitrate Market, By
End Use:
o Agriculture
o Mining
o Pharmaceutical
o Plastics
o Pulp & Paper
o Others
- India Ammonium Nitrate 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 Ammonium
Nitrate Market.
Available Customizations:
India Ammonium Nitrate Market report with the given
market data, TechSci 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 Ammonium Nitrate Market is an upcoming report
to be released soon. If you wish an early delivery of this report or want to
confirm the date of release, please contact us at [email protected]