India Ammonium Nitrate Market By Grade (Agriculture, Industrial, Food, Others), By Solids (High Density Ammonium Nitrate and Low Density Ammonium Nitrate), By End Use (Agriculture, Mining, Pharmaceutical, Plastics, Pulp & Paper, Others), By Region, Competition, Forecast and Opportunities, 2020-2030F
Published Date: December - 2024 | Publisher: MIR | No of Pages: 320 | Industry: Chemicals | Format: Report available in PDF / Excel Format
View Details Buy Now 2890 Download Sample Ask for Discount Request CustomizationIndia Ammonium Nitrate Market By Grade (Agriculture, Industrial, Food, Others), By Solids (High Density Ammonium Nitrate and Low Density Ammonium Nitrate), By End Use (Agriculture, Mining, Pharmaceutical, Plastics, Pulp & Paper, Others), By Region, Competition, Forecast and Opportunities, 2020-2030F
| 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
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-
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.
Key Market Drivers
Rising Agricultural Demand
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
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 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
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.
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
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.
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
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.
Key Market Challenges
Rising imports
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.
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.
in January 2024, the Indian government approved incentives worth USD 1.01 Billion for coal gasification projects.
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.
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.
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 launched 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.
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
- InAugust 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'sweak nitric acid capacity by approximately 57%. Additionally, the company hasreceived approval to invest in Ammonium Nitrate as a downstream product. TheBoard has also sanctioned the appointment of Kearney as the StrategicManagement Consultant (SMC) to help define the company's strategic direction.
- InFebruary 2024, Coal India Limited (CIL) and Bharat Heavy Electricals Limited(BHEL) signed a joint venture agreement (JVA) to establish an ammonium nitrateplant using surface coal gasification (SCG) technology. The plant, set to belocated in the Lakhanpur area of Mahanadi Coalfields Limited in Odisha, aimsfor 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 ofcoal, which will be sourced from CIL. BHEL will provide its indigenouslydeveloped pressurized fluidized bed gasification (PFBG) technology for thisinitiative.
- InApril 2023, Chambal Fertilisers revealed its plans to build a greenfieldtechnical ammonium nitrate (TAN) plant with a capacity of 240,000 tonnes peryear at its Gadepan complex in northwestern Rajasthan. The company is alsoplanning to establish a 210,000 tonne/year weak nitric acid (WNA) line, with atotal estimated investment of USD 201 Million. Both facilities are expected tocommence operations by October 2025, with the WNA unit providing feedstock forthe TAN plant.
- InFebruary 2023, Rashtriya Chemicals and Fertilizers Ltd. selected Casale’sNitroPIPE technology for a new 425 MTPD ammonium nitrate melt facility inTrombay, India. The project will be executed on a Lump Sum Turn Key (LSTK)basis by Larsen & Toubro's Energy Hydrocarbon Division. Casale will supplythe license, process design package, proprietary equipment, and review keyengineering documents, while L&T will serve as the primary EPC contractor.
Key Market Players
- DeepakFertilisers and Petrochemicals Corporation Limited
- MahadhanAgriTech Limited
- GujaratNarmada Valley Fertilizers & Chemicals Limited
- RashtriyaChemicals and Fertilizers Limited
- NationalFertilizers Limited
- YaraFertilisers India Pvt. Ltd.
- ChambalFertilisers and Chemicals Ltd.
- VijayGas Industry Pvt. Ltd.
- MachharIndustries Limited
| By Grade | By Solids | By End Use | By Region |
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