The government is scouting for an Iranian partner to set up a fertilizer plant entailing an investment of $1.029 billion in a urea plant in the Persian Gulf nation.
India revived its plans after Iranian authorities approached the government officials and showed interest to partner with them in the project, Press Trust of India reported. India had nominated state-run Rashtriya Chemicals and Fertilizers, Gujarat Narmada Valley Fertilizers & Chemicals and Gujarat State Fertilizers Corporation for the proposed 1.3 million tons urea plant.
"Now the government is looking for an Iranian partner to be part of this project. And therefore a senior delegation from India will visit Iran next month," a source said.
The proposal is to set up a urea joint venture plant at Chabahar in Iran, using natural gas as feedstock, which is abundant in the country.
"Indian government officials have conveyed to the Iranian authorities that they are looking for a long-term gas contract at feasible rates for producing urea," the source said.
Both nations have been talking to each other since 2013 for setting up of the fertilizer plant in the Persian Gulf nation, but talks were stuck over gas price.
The proposed urea plant in Iran would be on the lines of Oman-India Fertilizer Company in Oman, where the Indian entities have jointly invested in urea manufacturing with local player.
OMIFCO is 50% owned by the Oman Oil Company SAOC and 25% each by the Indian Farmers Fertilizer Cooperative and Krishak Bharati Cooperative Limited.
The Indian government has a long-term offtake arrangement with OMIFCO for sourcing urea, which is produced at lower rates compared to domestic production.
India's annual urea demand is about 30 million tons, while domestic production is around 22 million tons.
