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Threat to National Security:Ban on Loose Form Import of Ammonium Nitrate
Sep 12, 2015

In a major relief for domestic manufacturers of Ammonium Nitrate (AN) and security agencies, the Ministry of Home Affairs have asked Department of Industrial Policy and Promotion (DIPP) not to allow bulk import of this chemical in loose form on the ground that it poses threat to national security.

  • As per the directive, ammonium nitrate has to be imported in bagged form only irrespective of quantity in each bag and the consignment has to be packed at the point of origin.

  • With this, the mid-August notification of the Ministry of Shipping that had allowed a port in South India to facilitate bulk import of this chemical in any form has become null and void.

  • The green signal for bulk import in any form was interpreted as import in loose form and its possible indiscriminate import had raised concerns on threat to Indian’s national safety and security as ammonium nitrate is an extremely dangerous explosive substance.

  • Domestic manufacturers such as Rashtriya Chemicals and Fertilizers, Gujarat State Fertilizer and Chemicals and Deepak Fertilizers and Petrochemicals Corporation, which together have an installed capacity of 7,70,000 tonnes, had, through their association, raised objections as cheaper imports would have severely impacted their business.

  • Besides, they had made investments in bar coding of AN bags, IT infrastructure and tracking devices to comply with government’s guidelines to ensure that even a small quantity of AN does not land in wrong hands.

  • AN is so dangerous that the Home Ministry, in its latest order, has made it mandatory to make provision for two arm guards with GPS system to provide security for vehicles transporting AN inside India.

  • India consumes about 7 lakh tonnes of AN, a basic raw material for producing civil explosives used in mining and infrastructure industry.

  • Since imported AN is 15 to 20 per cent cheaper, explosive manufacturers, who supply to mining and infrastructure companies, have been lobbying for bulk import that too in loose form to make it even more cheap.

  • About 15 per cent of ammonium nitrate consumed in India is imported. This ratio has come down from 60 per cent in 2010 since domestic capacity has been increased.

  • Though the local industry has no major issues with imports in bagged form, it wants a level playing field as it was made to adhere to the government’s directives on proper use of AN.

  • To regulate the legitimate use of AN, the central government had introduced AN Rules that came into force in 2013, with primary focus on security and safety concerns in the country. A year before, loose import of AN, that was allowed at few ports was banned.

  • Stringent norms were formulated for identification of source such as backward traceability to the manufacturer and accounting of all sales or purchases.

  • While the rule makers did appreciate the need for import in bagged form, the rule says “Ammonium nitrate should preferably be imported in bagged form”. The importers started taking benefit of interpretation to continue to import in loose form and bagging it in the country here.

  • Manual handling in loose form has chances of material loss and there is potential risk to national security. Besides, ammonium nitrate, lying scattered on the wharf, also poses risk of explosion like the recent one at port of Tianjin in China.

  • Globally, the entire trade of AN for explosive, be it export or import is done in big bags of 1 to 1.2 tonnes.

  • Bagged AN is the pre-condition of all major ports. This has to be adhered to in India as well.

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