Fertiliser output steady despite West Asia crisis; government secures 37 lakh ton urea imports for kharif

Total domestic fertiliser production stood at 62.37 lakh tonnes during March–April 2026, while imports were at 15.39 lakh tonnes — together adding approximat...

What Happened

Total domestic fertiliser production stood at 62.37 lakh tonnes during March–April 2026, while imports were at 15.39 lakh tonnes — together adding approximately 78 lakh tonnes to national availability despite disruptions from the West Asia conflict.
Domestic urea production reached 37.49 lakh tonnes over the same period (March: 16.49 LT; April: 21 LT), nearly matching year-ago levels even as natural gas supply from Gulf sources faced pressure.
The government has separately secured 37 lakh tonnes of imported urea to meet the anticipated shortfall ahead of the Kharif 2026 sowing season, which begins in June.
For Kharif 2026, against a total fertiliser requirement of 390.45 lakh tonnes, current stocks stand at 193.38 lakh tonnes — approximately 50% of total need — with urea availability at 73.81 lakh tonnes and DAP at 23.47 lakh tonnes.
The government dismissed claims of any impending fertiliser shortage, characterising supply as "strong and stable."

Static Topic Bridges

India's Urea Economy — Production, Imports, and Subsidy

Urea is India's most widely used nitrogenous fertiliser, accounting for approximately 50% of total fertiliser consumption. The government maintains a fixed Maximum Retail Price (MRP) for urea at ₹242 per 45 kg bag (subsidised), irrespective of international prices, making the subsidy difference borne entirely by the Central Government. This price control makes urea politically sensitive and fiscally significant.

India's annual urea consumption: approximately 28–30 million tonnes (2.8–3.0 crore tonnes).
Domestic urea production: approximately 21–22 million tonnes (about 70–75% of consumption); remainder imported.
Primary sources of urea imports: Oman (approximately 46%), Russia (approximately 16%), Saudi Arabia (approximately 9%), UAE (approximately 6%) — most routed through or near the Strait of Hormuz.
Natural gas accounts for approximately 90% of urea production costs; India's domestic plants rely heavily on natural gas from long-term Gulf contracts.
Fertiliser subsidy budget for 2026–27: provisionally set at ₹1.71 lakh crore; at-risk of overshooting due to higher international urea prices (spiked to approximately $700/tonne in April 2026 vs. pre-crisis baseline of $265–300/tonne).

Connection to this news: The government's pre-emptive procurement of 37 lakh tonnes of imported urea ahead of Kharif 2026 is a supply security measure specifically designed to insulate farmers from the price volatility and shipping disruptions in the West Asia corridor.

West Asia Crisis and India's Fertiliser Supply Chain

The armed conflict in West Asia in 2026, involving disruption to shipping through the Strait of Hormuz, created simultaneous pressure on both natural gas supply for domestic urea production and on the import routes through which India sources urea, DAP (Di-ammonium Phosphate), MOP (Muriate of Potash), and other fertilisers.

Strait of Hormuz significance: approximately 20% of global petroleum and a significant share of LNG and fertiliser shipments transit this strait; any closure or restriction creates immediate supply shocks.
India sources approximately 86% of the natural gas used in domestic urea plants from long-term contracts with Gulf suppliers (Oman, Qatar, UAE) — transiting Hormuz.
DAP imports are dominated by China (the largest global DAP exporter) and Jordan/Morocco (phosphate rock); potash (MOP) comes primarily from Canada, Russia, and Belarus — routes not directly affected by Hormuz.
India expanded fertiliser sourcing diversification in 2026: expediting plans for a urea plant in Russia, sourcing from Central Asian suppliers, and accelerating domestic natural gas production.

Connection to this news: The stable production figures (62.37 LT domestic production in March–April) demonstrate that the supply chain has been largely held intact despite the geopolitical shock — a combination of pre-positioned stocks, alternative sourcing, and domestic production resilience.

Nutrient-Based Subsidy (NBS) and the Urea Anomaly

India operates a Nutrient-Based Subsidy (NBS) system for all fertilisers except urea. Under NBS, subsidies are fixed per kilogram of nutrient (nitrogen, phosphorus, potassium, sulphur), and MRP is market-determined (within limits). Urea is kept outside NBS and under price control — creating a pricing anomaly that encourages over-application of urea relative to other nutrients, distorting the N:P:K ratio in Indian soils.

Ideal N:P:K ratio recommended for Indian soils: approximately 4:2:1; actual ratio has been skewed toward nitrogen (urea) due to its artificially low price.
The Neem-Coated Urea policy (mandatory from 2015) was introduced to reduce urea diversion to non-agricultural uses and slow its release in soil.
The government's One Nation One Fertilizer scheme (under PM Pranam) aims to rationalise fertiliser branding and promote balanced nutrient use.
Fertiliser subsidy is a charged expenditure on the Consolidated Fund of India; it does not require parliamentary vote for release but is subject to budgetary provision.

Connection to this news: The price spike in international urea markets caused by the West Asia crisis will inflate the subsidy bill significantly — reinforcing long-standing concerns about the fiscal sustainability of urea price controls.

Key Facts & Data

Domestic fertiliser production (March–April 2026): 62.37 lakh tonnes.
Fertiliser imports (March–April 2026): 15.39 lakh tonnes.
Domestic urea production (March–April 2026): 37.49 lakh tonnes.
Imported urea secured for Kharif 2026: 37 lakh tonnes.
Kharif 2026 total fertiliser requirement: 390.45 lakh tonnes.
Current stocks vs. Kharif requirement: 193.38 lakh tonnes (approximately 50% covered).
Urea current availability: 73.81 lakh tonnes; DAP: 23.47 lakh tonnes.
Fixed MRP of subsidised urea: ₹242 per 45 kg bag.
Fertiliser subsidy budget 2026–27: ₹1.71 lakh crore (at risk of overshooting).
International urea price in April 2026: approximately $700/tonne (pre-crisis: $265–300/tonne).
Top urea import sources: Oman (46%), Russia (16%), Saudi Arabia (9%), UAE (6%).
India's annual urea import dependency: approximately 25–30% of total consumption.
Neem-Coated Urea policy: mandatory since 2015 for all domestically produced urea.