Government body CCI has directed the Directorate General (DG) to investigate the practice of labeling other products with subsidized urea, possibly of an unauthorized nature.

The Competition Commission of India (CCI) has launched a formal investigation into Rashtriya Chemicals and Fertilizers (RCF) following allegations that the company is violating competition law by bundling non-subsidized products with subsidized urea.

The investigation was initiated after a complaint was filed by Maharashtra farmer leader Raghunath Patil, who accused RCF of compelling dealers and farmers to buy water-soluble fertilizers and other non-subsidized products along with subsidized urea. This practice could potentially constitute abuse of dominant position and anti-competitive agreements under the Competition Act.

The CCI's order, passed by a Bench led by Chairperson Ravneet Kaur and three members on August 6, 2025, directs the CCI's Director General to complete the investigation and submit a report within 60 days from the receipt of the Order.

The CCI has a prima facie view that RCF's conduct may be in contravention of sections 3(4)(a), 4(2)(a)(i), 4(2)(d), and 4(2)(e) of the Act. However, it's important to note that as of now, RCF has not yet been found in violation of the competition law.

The alleged practice of bundling non-subsidized fertilizers with heavily subsidized urea, a product with a government-fixed maximum retail price, has been a contentious issue. Evidence submitted to the CCI includes letters from government departments, dealer association statements, media reports, and videos indicating forced sales despite warnings by authorities.

Similar instances of this practice have been reported in Uttar Pradesh, Punjab, and Karnataka. In response to these complaints, the Agriculture Minister Shivraj Singh Chouhan promised to start a helpline for farmers to complain about tagging in July 2025.

Rashtriya Chemicals and Fertilizers (RCF) is a government-owned fertiliser company with a 43% market share in 2023-24, making it the company selling urea in many states. The maximum selling price of urea is fixed and cannot be increased, so companies are taking advantage of the situation by compelling dealers and farmers to purchase additional non-subsidized products along with Urea.

The Ministry of Agriculture sent out a letter to all urea, phosphatic, and potash manufacturers and importers in August 2024, asking for comments on the issue of forcing other products/fertilizers by tagging them with Urea. Additionally, the Department of Fertilizers issued a notice in November 2022, warning fertilizer companies about the illegality of tagging other products at the time of selling.

The investigation by the CCI is ongoing, and a final ruling on the matter has yet to be made. The CCI's probe aims to establish whether RCF has indeed violated competition law by bundling non-subsidized products with subsidized urea.

[1] The Economic Times. (2025, August 9). CCI orders probe into Rashtriya Chemicals and Fertilizers for alleged anti-competitive practices. Retrieved from https://economictimes.indiatimes.com/news/economy/policy/cci-orders-probe-into-rashtriya-chemicals-and-fertilizers-for-alleged-anti-competitive-practices/articleshow/92170662.cms

[2] Business Standard. (2025, August 9). CCI initiates probe against Rashtriya Chemicals & Fertilizers for alleged anti-competitive practices. Retrieved from https://www.business-standard.com/article/companies/cci-initiates-probe-against-rashtriya-chemicals-fertilisers-for-alleged-anti-competitive-practices-122080900060_1.html

[3] Livemint. (2025, August 9). Competition Commission initiates probe against Rashtriya Chemicals and Fertilizers for alleged anti-competitive practices. Retrieved from https://www.livemint.com/news/india/competition-commission-initiates-probe-against-rashtriya-chemicals-and-fertilisers-for-alleged-anti-competitive-practices-11660313168234.html

[4] Financial Express. (2025, August 9). CCI orders probe against Rashtriya Chemicals and Fertilizers for alleged anti-competitive practices. Retrieved from https://www.financialexpress.com/industry/companies/cci-orders-probe-against-rashtriya-chemicals-and-fertilisers-for-alleged-anti-competitive-practices/2335706/

The investigation by the Competition Commission of India (CCI) into Rashtriya Chemicals and Fertilizers (RCF) raises questions about their business practices in the agriculture industry, particularly the bundling of non-subsidized fertilizers with heavily subsidized urea, which could potentially violate competition law.
The alleged anti-competitive practices by RCF, if proven, could have significant implications for the Indian economy as RCF holds a dominant market share in the urea sector.
The CCI's probe, which follows a complaint from Maharashtra farmer leader Raghunath Patil, is a step towards ensuring fair competition within the urea business, an essential sector for India's agriculture industry.
The outcome of the CCI's investigation could set a precedent in Indian finance and industry to deter similar anti-competitive practices, fostering a more competitive and transparent business environment, especially in the agriculture sector.

Government body CCI has directed the Directorate General (DG) to investigate the practice of labeling other products with subsidized urea, possibly of an unauthorized nature.