India to Supply 50,000 Metric Tons of Chemical Fertilizer to Nepal

Kathmandu. Despite challenges in the global supply chain and a decline in the availability of chemical fertilizers, India has agreed to provide 50,000 metric tons of chemical fertilizer to Nepal.

At the special request of the Government of Nepal, 30,000 metric tons of urea and 20,000 metric tons of DAP fertilizer will be provided at a subsidized rate under the Government-to-Government (G2G) agreement in the first phase.

According to Dr. Ramkrishna Shrestha, Chairman of the Agricultural Inputs Company Limited and Joint Secretary of the Ministry of Agriculture, Forest, and Environment, the Council of Ministers, in its meeting on May 11, had provided policy-level approval to purchase 60,000 metric tons of urea and 40,000 metric tons of DAP fertilizer from India.

Based on the approved policy, the designated government companies of Nepal and India signed a G2G Memorandum of Understanding. The commercial purchase process has been initiated between Nepal's Agricultural Inputs Company Limited and India's National Chemicals and Fertilizers Limited.

In the first phase of the process, the Agricultural Inputs Company sent a 'Purchase Requisition' to India's RCF, requesting the required quantity and price rate of fertilizer. Subsequently, RCF completed the tender process internally in India and sent the obtained price rate to Nepal.

Joint Steering Committee (JSC) Determined the Quantity

After receiving the price rate, a virtual meeting of the G2G mechanism's 'Joint Steering Committee', comprising officials from both countries, was held. The meeting was co-chaired by Joint Secretary Dr. Ramkrishna Shrestha from Nepal and the Joint Secretary of India's Department of Chemical Fertilizers.

In the meeting, considering Nepal's financial situation and the availability of internal resources, the decision to purchase 30,000 metric tons of urea and 20,000 metric tons of DAP for the first phase was approved. According to Dr. Shrestha, RCF has made special coordination to manage the necessary fertilizer and provide it to Nepal at a subsidized rate.

Purchase Order and Work Order Issued, Payment Preparation Underway

Following the approval of the purchase quantity and price by the JSC meeting, Nepal has expedited the formal processes. The Agricultural Inputs Company has sent a formal 'Purchase Order' and the necessary work order to RCF to commence supply.

'We have sent the purchase order and work order and are currently in the final stage of sending the money (payment) as per the process,' informed Dr. Shrestha.

When Will the Fertilizer Arrive in Nepal?

As per the formal agreement, the Indian company must supply the fertilizer within 120 days of receiving the purchase order. However, as agricultural activities are intensifying in Nepal and farmers urgently need fertilizer, Nepal made a special request in the JSC meeting to shorten the delivery period.

'We clarified that the 120-day period would be too late for us and urged for supply as soon as possible,' said Dr. Shrestha. 'The Indian side has also responded positively, coordinating with their local suppliers, and has committed to making efforts to send the fertilizer to Nepal as quickly as possible.'

However, Dr. Shrestha clarified that the fertilizer would not arrive tomorrow or the day after. The payment process is currently in its final stage, and once that is completed, the physical work of transportation will begin.

How Much Fertilizer Does Nepal Have?

According to ministry data, as of Jestha 18, 2082/083 (Fiscal Year 2082/083), a total of 329,689 metric tons of urea fertilizer had been supplied. Out of this, 275,993 metric tons have already been sold.

Of the total urea supplied, the Agricultural Inputs Company Limited managed 262,793 metric tons and Salt Trading Corporation managed 66,896 metric tons. Currently, 80,900 metric tons of urea fertilizer are secured in government warehouses, and an additional 488 metric tons of urea are en route, the ministry stated.

The supply of DAP fertilizer for paddy cultivation has been 200,832 metric tons, of which 174,000 metric tons have been sold.

Currently, 40,760 metric tons of DAP are in stock in government warehouses across the country. The Agricultural Inputs Company has distributed 111,921 metric tons and Salt Trading has distributed 62,081 metric tons of DAP. An additional 2,846 metric tons of DAP fertilizer are currently in the import process.

Regarding potash, the ministry stated that demand and supply appear balanced. This year, 27,268 metric tons of potash have been supplied, of which 15,323 metric tons have been sold.

Currently, 19,180 metric tons of potash are in stock in warehouses, and the government estimates that this will meet the immediate demand. The government had set a target of supplying 600,000 metric tons of fertilizer for the fiscal year 2082/083 with a budget allocation of 28.8214 billion rupees, for which tender processes have already been completed for 491,300 metric tons of fertilizer.