The government has decided to control free movement of ammonium nitrate in order to restrict its use as explosives by terrorists.
Efforts are being made to bring the substance under the purview of Explosive Substances Act to regulate its use and a bill in this regard is likely to be tabled in Parliament during the monsoon session, home ministry officials said.
"A bill on this is likely to be tabled in Parliament during the monsoon session," a home ministry official said.
The decision to introduce the bill assumes significance after central security agencies found that ammonium nitrate was being used by terror groups in carrying out blasts, including the triple explosions which rocked Mumbai on Wednesday.
Traces of ammonium nitrate were found from the blast sites at Zaveri Bazar, Opera House and Dadar in the country's financial capital.
Security agencies and several state police forces have also been calling for measures to check misuse of the chemical.
At present, ammonium nitrate does not come under the purview of Explosive Substances Act as it is widely used in fertilisers and any ban on it may result in adverse effect on farming.
The home ministry is also coordinating with state governments to frame elaborate rules under the Act to strengthen the framework for regulating manufacture, storage, transport and sale of explosives.
The "in-principle" approval for the amendment of the Act has already been given by the Union cabinet at its special meeting in the aftermath of the Delhi blasts in 2008.
Some suggestions have already been given to states to check use and trading of ammonium nitrate to ensure that it does not land into wrong hands, they said.