What Happened
- A CareEdge Ratings report flagged that approximately 26.2% of India's fertiliser imports originate from West Asia, a region currently affected by ongoing geopolitical conflict, raising supply disruption risks.
- The disruption is particularly concerning ahead of the Kharif sowing season (April–September), when fertiliser demand surges significantly for crops like rice, cotton, maize, and pulses.
- The report highlighted that rising LNG prices — a key feedstock for nitrogenous fertiliser production — could push up fertiliser prices globally, potentially increasing India's subsidy burden.
- The Strait of Hormuz's role as a critical maritime chokepoint further amplifies the risk: approximately 40% of India's crude oil imports and about 90% of its LNG imports transit through or near the strait.
- El Nino conditions, which historically reduce monsoon rainfall in India, compound the risk — higher import disruptions coinciding with a potentially weaker monsoon could create a dual agricultural stress scenario.
- Government sources indicated India has been fast-tracking fertiliser imports and the Fertiliser Association of India noted that, as of mid-March, urea stocks stood at about 62 lakh tonnes, DAP stocks at about 25 lakh tonnes, and NPK stocks at a record 56 lakh tonnes.
Static Topic Bridges
India's Fertiliser Import Dependence and Supply Sources
India is one of the world's largest consumers of chemical fertilisers. While it is self-sufficient in urea production to a significant degree (using domestic natural gas and coal), it is heavily import-dependent for phosphatic and potassic fertilisers: approximately 100% of muriate of potash (MOP/potash) is imported, and a significant share of DAP (di-ammonium phosphate) is also imported.
- Top fertiliser import sources: West Asia 26.2%, Jordan 19.2%, Russia 15.5%, Morocco 10.4%, China 5.7%, Egypt 5.6%, Canada 3.8%, Togo 3.6%
- Jordan is the world's second-largest phosphate producer (key for DAP and SSP)
- Russia is a major supplier of potash, urea, and phosphates — affected by ongoing global sanctions context
- India's total fertiliser subsidy budget (2025-26): approximately ₹1,91,836 crore (revised estimate), one of the largest components of central government expenditure
Connection to this news: West Asia's 26.2% share of India's fertiliser imports means conflict and maritime disruption in the region directly threatens supply security for a critical agricultural input — any shortage or price spike feeds directly into India's subsidy burden and farm-gate costs.
India's Fertiliser Subsidy Framework — Urea and NBS Scheme
India's fertiliser subsidy has two distinct mechanisms depending on the type of fertiliser. Urea is a controlled fertiliser with a government-fixed Maximum Retail Price (MRP) of ₹242 per 45 kg bag (unchanged since 2018), and the full cost difference between production/import cost and MRP is borne by the government as subsidy — making the government liable for any global price surge.
For phosphatic and potassic (P&K) fertilisers, the Nutrient Based Subsidy (NBS) scheme (introduced April 1, 2010) provides a fixed per-kg subsidy on nutrients (N, P, K, S), with the remaining cost passed to farmers within a monitored but not fixed MRP. The NBS rates are revised biannually (Kharif and Rabi seasons) by the Union Cabinet on the recommendation of the Department of Fertilizers.
- Urea: MRP fixed at ₹242/45 kg bag since March 2018; any cost above this borne by central government
- NBS scheme (from April 1, 2010): covers P&K fertilisers; fixed per-nutrient subsidy, decontrolled MRP
- Kharif 2025 NBS subsidy outlay: ₹37,216.15 crore (approved by Union Cabinet)
- Rabi 2025-26 NBS subsidy: approximately ₹37,952.29 crore
- Special DAP package: government extended ₹3,500 per tonne additional subsidy on DAP (April 2024 to March 2025) due to global price pressures
Connection to this news: Any West Asia supply disruption that raises global fertiliser prices would automatically increase India's subsidy outgo under the urea MRP regime, and put upward pressure on NBS P&K prices — threatening both fiscal stability and farm-input affordability.
Kharif Cropping Season — Agricultural Significance
India's agricultural calendar has two main cropping seasons: Kharif (June–November, sown with onset of monsoon) and Rabi (October–March, dependent on winter rainfall and irrigation). Kharif accounts for over 60% of India's total agricultural output and includes the nation's most important food security crops.
- Kharif sowing begins: June (with southwest monsoon onset); fertiliser procurement must be in place by April–May
- Key Kharif crops: rice (paddy), cotton, maize, soybean, groundnut, sugarcane, jowar, bajra, tur (arhar), moong, urad
- Fertiliser requirement for Kharif: ~35–40 million tonnes NPK equivalent
- El Nino effect on India: weakens Indian Ocean Dipole (IOD) and reduces southwest monsoon rainfall by 10–20%, historically associated with drought years (e.g., 2002, 2009, 2014)
- A combination of supply disruption AND El Nino-induced drought would be a severe double stress on food security
Connection to this news: The CareEdge report's warning gains particular urgency because the Kharif sowing window is narrow — if fertiliser supplies are disrupted or prices spike during March–May, farmers either skip optimal fertiliser doses (reducing yields) or the government faces emergency procurement at premium prices.
Strait of Hormuz — Strategic Maritime Chokepoint
The Strait of Hormuz is a narrow waterway (minimum width 33 km) between Iran and Oman connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea. It is the world's most critical oil transit chokepoint, through which approximately 20 million barrels per day (roughly 20% of global oil consumption) pass.
- Approximately 40% of India's crude oil imports transit through or near the Strait of Hormuz
- Approximately 90% of India's LNG imports transit through the Strait of Hormuz (India imports ~60% of its LNG consumption)
- India has been diversifying: about 70% of crude oil imports now come from routes outside the strait (up from 55% previously)
- LNG is a key feedstock for ammonia synthesis (Haber-Bosch process) → urea production; LNG price spikes → fertiliser price spikes
- 89% of crude oil transported through the Strait of Hormuz goes to Asian markets (China, India, Japan, South Korea)
Connection to this news: The Strait of Hormuz threat is not just about crude oil — its disruption also raises global LNG prices, which directly feeds into the cost of manufacturing nitrogen fertilisers (particularly urea and ammonium nitrate), creating a direct linkage between geopolitical risk and India's agricultural input costs.
Key Facts & Data
- West Asia share of India's fertiliser imports: 26.2% (CareEdge Ratings, 2026)
- Top import sources: West Asia 26.2%, Jordan 19.2%, Russia 15.5%, Morocco 10.4%
- Kharif season: April–September (sowing peak: June–July with monsoon onset)
- India's urea MRP: ₹242 per 45 kg bag (unchanged since March 2018)
- NBS scheme: introduced April 1, 2010, covers P&K fertilisers
- India's total fertiliser subsidy budget 2025-26: ~₹1,91,836 crore
- Urea stocks (as of mid-March 2026): ~62 lakh tonnes; DAP: ~25 lakh tonnes; NPK: ~56 lakh tonnes (record)
- India's LNG imports through Strait of Hormuz: approximately 90%
- Strait of Hormuz: handles ~20 million barrels/day (~20% of global oil consumption)