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Business News » India News

India's nitrogen market boom! What's driving the growth? An insight

India's competitive nitrogen market growth rate of 11.2% yearly has attracted the reaction of major industry players who attribute the industry success to progressive policies and a vibrant ecosystem. 

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India's nitrogen market boom! What's driving the growth? An insight
According to the report by the FAO, India produced 13.72 million metric tonnes of nitrogen in 2019, but also consumed 18.86 million metric tonnes on agriculture alone. Pic: Pixabay

The world is currently witnessing exponential growth in the nitrogen market, thanks to increasing demand in the food and beverage and iron and steel manufacturing industries. According to data from the Business Research Company, the global nitrogen market is currently valued at nearly $35 billion but is projected to gross $53.85 billion by 2026, growing at a CAGR of 11.4% in the next four years. Nitrogen is an inert gas known for its colourless, odorless and non-flammable qualities, with numerous applications in several industries.

Nitrogen makes up 78% of atmospheric air and is a critical requirement in the food packaging industry as a preservative, as an antioxidant in steel manufacturing and other applications in the healthcare, automotive, agrochemical, and chemical industries. With fast-paced recovery from the COVID-19 pandemic, there appears to be massive expansion by existing players and the emergence of new players in the sector. As of 2019, Germany, the United States, France, the Netherlands, Belgium, Austria, Poland and the European Union were the biggest exporters of the product, as per World Bank reports.

India is one of the world's largest producers of nitrogen, with 2019 statistics putting the country's output only behind that of China. According to the report by the FAO, India produced 13.72 million metric tonnes of nitrogen in 2019, but also consumed 18.86 million metric tonnes on agriculture alone. This leaves a deficit of about 5.14 million metric tonnes which creates massive opportunity for investment in the sector.
 
India's nitrogen market 

India's competitive nitrogen market growth rate of 11.2% yearly has attracted the reaction of major industry players who attribute the industry success to progressive policies and a vibrant ecosystem. 

Amit sahni, CEO, Absstem industrial solutions Pvt. Ltd., said that impressive government policies are the biggest catalyst for the growth being experienced in the nitrogen industry. This has led to increased demand for nitrogen in the country, especially in sectors like medical equipment, semiconductor, and oil and gas manufacturing which are greatly supported by the government.

"The government has also been very committed to providing incentives towards creating an environment that supports Make-in-India manufacturing. There's also a 50% funding vehicle for electronic manufacturing clusters, coupled with massive infrastructural investments, which has led to a boost in the demand for nitrogen and other industrial gases," he said.

The Russian-Ukraine war is another factor that has seen India overtaking  Russia as the fastest growing nitrogen market in the world, with the European nation seeing a drop in growth rate from 12.2% to 10%.

India's crude steel production grew by 18% in 2021 to approximately 118 metric tonnes, according to the World Steel Association. This has been attributed to the expanding manufacturing space and the rising profile of emerging industries like drone production. These strong moves tend to have an impact on the nitrogen sector as well. 

The Make-in-India initiative launched in 2014 has also received wide acceptance and provided the launchpad for Indians and non-Indians home and abroad to move into the manufacturing space in the country.

"But there's still a lot to do. We need to be able to meet local demand for nitrogen and its byproducts like nitrogen fertilisers, and then begin to focus on how we can move into the export space. We can leverage existing technology like air separation plants or even look towards developing local technology. There's so much potential in the global nitrogen space and the future is promising, so we need to ask ourselves what role we want India to play in the future of nitrogen," Sahni said.

Indeed, India's prospects in the nitrogen space are encouraging. The country is on the right path - one that can see it double its current nitrogen output in less than 10 years. However, population growth and increasing demand for the product puts more pressure on producers. What is undeniable is the fact that India needs to find a way to save the millions (in dollars) it currently spends on nitrogen imports by boosting production.

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TAGS:
nitrogen marketRussia Ukraine warIndian marketWorld BankMake in IndiaCovid 19
Written By: Abhinav Ranjan
Updated: Fri, Aug 05, 2022
08:31 pm
ZeeBiz WebDesk

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