A case study of Indian fertilizer subsidy regime

Abstract

The project is to provide Yara International ASA with information regarding the Indian fertilizer subsidy policy. The problem definition for the research part of the project is as follows: “How does the Indian fertilizer subsidy policy regime influence the Indian environment, and will there be any changes in the fertilizer subsidy policy in the future?” Yara International ASA operates worldwide, and their core business is to be a provider of fertilizers. Due to the present fertilizer subsidy policy in India, it is now crucial for Yara International ASA to predict possible future changes in India’s policy. Because the present policy is not making the profits needed for Yara International ASA to sustain their operations, they are now at a stage where strategic decisions to either leave India’s market or continue further operations is needed. The report is divided into five parts; Part one is the introduction and covers the research details as well as information about Yara International ASA. Part two covers the literature review, where we inform about the social, political, environmental, technological and economical impact of subsidies. Part three covers our research methodology. Part four presents our case study about India, our analysis, and our findings. In part five, we present our recommendations for Yara International ASA. The recommendations are based on the findings from the literature review and the case study (secondary data) of India. Finally we present our conclusion. Based on the findings in this study, we will recommend Yara International ASA to continue their operation in India, and keep on their joint venture with Kribcho. Because it is likely that the fertilizer subsidy policy in India will in the future change.