Fertiliser output steady despite West Asia crisis; govt secures 37 lac ton urea imports for kharif

Despite the ongoing West Asia conflict disrupting global energy and shipping routes, India's domestic fertiliser production has remained broadly stable. Dome...

What Happened

Despite the ongoing West Asia conflict disrupting global energy and shipping routes, India's domestic fertiliser production has remained broadly stable.
Domestic urea output reached approximately 37.49 lakh tonnes in March–April 2026, close to year-ago levels.
The government has separately secured 37 lakh tonnes of imported urea to meet the shortfall ahead of the Kharif 2026 sowing season.
Total domestic fertiliser production in the March–April period stood at 62.37 lakh tonnes; imports were at 15.39 lakh tonnes.
For Kharif 2026, against a total fertiliser requirement of 390.45 lakh tonnes, current stocks already stand at 193.38 lakh tonnes — approximately 50% of the season's needs — providing an early comfort margin.
The West Asia conflict has raised supply-chain concerns because nearly 45–50% of India's Liquefied Natural Gas (LNG) imports originate in Gulf producers, and natural gas constitutes around 80% of the cost of producing urea domestically.

Static Topic Bridges

India's Fertiliser Sector and Urea Policy

Urea is the most widely used fertiliser in India, accounting for roughly 56% of all fertiliser consumption and about 80% of nitrogenous fertilisers. Of India's 32 urea manufacturing plants, 31 run on natural gas (domestic gas, LNG, or Coal Bed Methane); the remaining unit uses a gas-naphtha mix. This high dependence on natural gas makes the sector vulnerable to global energy price volatility.

The Maximum Retail Price (MRP) of urea has been fixed at ₹242 per 45-kg bag since 2018, shielded from global price swings by a large government subsidy.
Urea is not covered under the Nutrient Based Subsidy (NBS) scheme (which applies to phosphatic and potassic fertilisers); instead, it has a separate price-control regime with the government paying the difference between production cost and MRP as subsidy to manufacturers.
Fertiliser subsidy is India's second-largest subsidy after food subsidy, creating significant fiscal pressure when international natural gas or urea prices spike.
India also imports urea to bridge the gap between domestic production capacity (~290–310 lakh tonnes/year) and actual demand (~330–360 lakh tonnes/year).

Connection to this news: The West Asia crisis threatens India's LNG supply lines, raising the cost and reliability of urea production. The government's advance procurement of 37 lakh tonnes of imported urea is a contingency measure to insulate the Kharif season from this supply-chain risk.

Nutrient Based Subsidy (NBS) Scheme and Fertiliser Policy Architecture

Launched on April 1, 2010, the NBS scheme provides a fixed per-kilogram subsidy on the nutrient content (N, P, K, S) of 28 grades of phosphatic and potassic (P&K) fertilisers paid directly to manufacturers and importers, allowing them to price their products at near-market rates while keeping end prices affordable for farmers.

NBS covers DAP (Di-Ammonium Phosphate), MOP (Muriate of Potash), SSP (Single Super Phosphate) and complex fertilisers — but not urea.
Under Direct Benefit Transfer (DBT) in fertilisers (e-Urvarak system), 100% subsidy is released to companies only after actual sale to beneficiaries is recorded via Point-of-Sale (PoS) machines linked with Aadhaar authentication.
The urea-NBS exclusion creates a policy distortion: subsidised cheap urea encourages over-application of nitrogen relative to phosphorus and potassium, leading to soil nutrient imbalance — a long-standing agricultural concern.
Policy experts and the Commission for Agricultural Costs and Prices (CACP) have repeatedly recommended bringing urea under the NBS regime.

Connection to this news: The supply crunch triggered by the West Asia crisis has reignited the debate about India's over-dependence on urea and natural gas, and the need to diversify both feedstocks and fertiliser use.

West Asia's Role in India's Energy and Agri-Input Supply Chain

West Asia (the Gulf region) is a critical node in India's energy import map. India sources significant volumes of LNG from Qatar, Oman, and the UAE. The Strait of Hormuz — through which roughly one-fifth of global oil and a large share of LNG transits — is vulnerable to disruption during regional conflicts.

Natural gas accounts for approximately 80% of the cost of manufacturing urea; any spike in LNG prices or supply disruption immediately raises the cost of domestic urea production.
India's LNG import dependence for fertiliser production is estimated at 45–50% of total LNG requirements for the sector.
Beyond urea, the region also matters for India's sulphur imports (used in SSP and complex fertilisers) and for overall shipping logistics.
Shipping route disruptions (Red Sea, Hormuz) increase freight costs and lead times for all fertiliser imports, including imported urea, DAP, and MOP.

Connection to this news: The direct transmission channel from West Asia conflict to Indian farm inputs is through LNG pricing, which raises domestic urea production costs and presses the government to pre-emptively secure imports before seasonal demand peaks.

Kharif Season and Agricultural Calendar

India's agricultural year is divided into two main crop seasons: Kharif (summer-sown, June–November) and Rabi (winter-sown, November–April). Kharif is the more fertiliser-intensive season, with paddy, maize, cotton, soybean, and pulses as major crops.

Fertiliser demand peaks in June–July during Kharif sowing and again in October–November for Rabi.
DAP is critical for Rabi wheat; urea is essential for Kharif paddy.
The government ensures state-wise fertiliser availability through a monitoring mechanism involving the Department of Fertilisers, FCI, and state civil supplies departments.
Adequate pre-positioning of fertilisers before the sowing window is critical because late supply can delay planting, cutting into yields.

Connection to this news: Securing 37 lakh tonnes of imported urea before the Kharif season begins is precisely this pre-positioning strategy — ensuring that farmers have timely access despite global supply disruptions.

Key Facts & Data

Domestic urea production (March–April 2026): ~37.49 lakh tonnes
Imported urea secured for Kharif 2026: 37 lakh tonnes
Total domestic fertiliser production (March–April 2026): 62.37 lakh tonnes
Total fertiliser imports (March–April 2026): 15.39 lakh tonnes
Kharif 2026 total fertiliser requirement: 390.45 lakh tonnes
Current Kharif 2026 stocks: 193.38 lakh tonnes (~50% of requirement)
Urea current availability: 73.81 lakh tonnes; DAP: 23.47 lakh tonnes
India has 32 urea manufacturing plants (31 gas-based)
Urea MRP fixed at ₹242 per 45-kg bag since 2018
Natural gas share in urea production cost: ~80%
LNG sourced from Gulf producers: ~45–50% of India's fertiliser-sector LNG
NBS scheme covers 28 grades of P&K fertilisers; urea is excluded