Cabinet okays Memorandum of Understanding with Malaysia for urea, ammonia supply

NEW DELHI: The Cabinet today approved an agreement signed with Malaysia for assured supply of urea and ammonia from a plant to be set up by the South-east Asian country.

As per the Memorandum of Understanding (MoU), India will buy from Malaysia the existing surplus urea and ammonia fertilisers as well as the production from the new plant.

"The Union Cabinet today gave its ex-post-facto approval to the signing of MoU with Malaysia on the development of a urea and ammonia manufacturing plant in Malaysia," an official release said.

The new plant is expected to cost $2.1 billion and will have a capacity to produce 2.4 million tonnes of urea and 1.35 million tonnes of ammonia per annum, it said.

The agreement will ensure a consistent supply of the key fertilisers at a lower price to India if agreed to by both the participants, it added.

India manufactures 24 million tonnes of urea and imports 7-8 million tonnes to meet the domestic demand.