India’s foodgrain output depends heavily on fertilizer inputs. During 2023–24 India consumed roughly 64.84 million tonnes (Mt) of fertilizer materials, and demand is rising steadily at a forecasted CAGR of 2.5% until 2030. Agriculture contributes to national GDP 18% and supports nearly 46% of the population for their sustenance. Therefore, fertilizer shortfall directly threatens food security and cause alarm in the political domain. Studies show that around 55% of the crop yields especially of staples like rice, wheat and maize in Indian fields is contributed by fertilizer use.

Nutrient Demand

India’s nutrient use is heavily weighted to nitrogen (urea) but growing to balance P and K. In 2023–24 all-India fertilizer use was about 64.8 Mt. By nutrient, this included 35.78 Mt of urea (N), 10.81 Mt of DAP (N+P), 11.07 Mt of NP/NPK complexes, 1.64 Mt of muriate of potash (KCl) and 4.54 Mt of single-superphosphate (SSP). Nitrogen is the single most nutrient used (68%) followed by phosphate and potash which are essential for many crops. Cereals like rice, wheat and maize consume the bulk of N, while pulses, oilseeds, vegetables and cotton need higher phosphorus and potassium.

Fertilizer products consumed in Indian farms include single-nutrient products (Urea, SSP), mixed/complex fertilizers (DAP, NPKs), micronutrient formulations (commonly Boron, Zinc and Magnesium) and bio stimulants. The nutrient content varies depending on the product. For instance, urea contains 46% N, DAP provides 18% N and 46% P2O5 and NPKs supply each of the nutrients in their respective content in the specific formulations. Therefore, a proper blend of the required products is needed to achieve a balanced nutrient ratio in the soil to achieve better crop yields. The optimum N: P2O5:K2O consumption ratio for the Indian soil is identified as 4:2:1 and it is ensured through soil testing and matching it with crop needs. Crops like sugarcane, cotton, vegetables and fruits are driving the demand for potash and specialty fertilizers (micro-nutrients, coated/slow-release), reflecting a shift toward precision nutrition.

Domestic Production Capacity and Sector Structure

India has expanded its fertilizer production base aggressively until 2000 when it achieved self-sufficiency in urea production. Since then, investments in the sector declined mostly under unfavorable policy climate, delayed disbursement of subsidies and free availability of imports. Production in the public sector fertilizer sector which remained stagnant over decades picked up only in 2016. Today, India is the world’s second largest consumer, third largest producer and largest importer of fertilizers. In 2023–24 domestic output was a record 50.5 Mt (all products), including 31.41 Mt of urea, 4.29 Mt of DAP, 9.55 Mt of NP/NPKs and 4.43 Mt of SSP Six new urea plants were commissioned in the past six years, adding 7.62 Mt capacity from brown field projects. The fertilizer sector is a mix of public, cooperative and private enterprises. In aggregate roughly 17% of production comes from public-sector companies, 25% from cooperatives and 58% from private firms.

Imports

India is not self-sufficient in the case of any of the nutrients. Although 87% of the urea demand is met by domestic production, the rest is imported. Most Indian plants operate at their achievable capacities and have well optimized consumption parameters. Natural gas is the primary feedstock for urea production. Domestic production of gas, import through LNG terminals and countrywide pipelines facilitated the growth of domestic urea production. In 2022–23 India imported 7.04 Mt of urea and 7.6 Mt of phosphates and the entire requirement of potash ( 2.87 Mt) spending over Rs. 40,000 crores ($3.5 bn) from government coffers.

When consumption growth continues and production remain stagnant, imports natural go up to meet the demand push. Self-sufficiency in urea production is achievable provided conducive policies are in place. The success of nano urea promoted by IFFCO and others will help to ease the demand for granulated product. As has been noted earlier, India remains heavily import-dependent for phosphate (P), potash (K) and specialty fertilizers. It will remain so even in the long run due to lack of indigenous raw materials.

Key suppliers

For supply of urea and other N-fertilizers, China and Gulf states dominate. China, Qatar, Saudi Arabia, Oman and UAE collectively supply much of India’s imported urea. DAP/P-fertilizers come mainly from China, Oman (Sohar), Saudi Arabia (SABIC/ Ma’aden), Jordan, Egypt and Morocco. Following the Chinese denial of export of DAP and specialty fertilizers to India, alternate supply sources are being pursued. Morocco’s OCP with the world’s largest phosphate reserves, agreed in January 2023 to sell India 1.7 Mt of phosphate fertilizers (DAP and TSP) in 2023. In mid-2025 Indian importers signed a five-year offtake with Saudi Arabia for 3.1 Mt/yr mostly of DAP/NPS and another multi-supplier deal with Morocco’s OCP for 1.5 Mt DAP and 1 Mt TSP.

Potash is imported traditionally from Canada (Nutrien), Russia, Belarus and Israel. Post-2022 India also sources K2O from Jordan (Arab Potash). Notably, Russia’s share of India’s potash imports leapt from 4.4% in 2021 to 29% by 2023. Specialty fertilizers (micronutrient chelates, slow-release urea, etc.) are sourced mainly from China. Due to Chinese export ban, India is seeking alternate sources (e.g. Russia, Jordan, Israel) and also trying to boost domestic production of controlled-release products. Just recently, the government has notified 101 more bio stimulants under the Fertilizer Control Order (FCO) taking the total notified formulations to 146. These formulations help plants withstand drought, salinity, extreme temperatures and other climate-induced stresses. Unlike traditional inputs, they improve nutrient use efficiency, soil carbon and root development, enabling farmers to produce more with less. These products can be tailored to specific crops, locations and soil types, making them highly adaptive to India’s vast agro-climatic diversity.

Geopolitics, Trade routes and disruptions

Global conflicts and chokepoint risks directly impact fertilizer products and raw material supplies to India. A large share of our imports transits the Strait of Hormuz and Red Sea.

Roughly 20–25% of India’s fertilizers raw materials (and most LNG) come through the Gulf region. The November 2023 Yemen/Red Sea crisis forced ships carrying phosphates and phosphoric acid to detour around Africa, delaying raw-material supplies. Similarly, the June 2025 Iran–Israel skirmish disrupted Middle Eastern ports, holding up shipments of rock phosphate and acid. These events coincided with other shocks e.g. China’s abrupt halt of fertilizer exports in mid-2025 – creating acute local shortages.

The Russia–Ukraine war has also reshaped global trade. Russia and Belarus were historically major exporters of urea, complex fertilizers and potash. After 2022, sanctions and closed routes shrank Belarus’ access, but Russia ramped up exports notably using Black Sea and alternate ports. PhosAgro, Russia's leading fertilizer producer, has significantly ramped up exports to India in 2025 to address the China-induced shortfall.

In the first half of 2025, PhosAgro's shipments to India grew by nearly 41% year-on-year, making India one of its fastest-growing markets. Overall, Russia's complex and compound fertilizer exports to India surged 42% year-on-year, reaching 1.5 Mt from December 2024 to mid-2025. PhosAgro's total exports rose 10% to 4.3 Mt in January-May 2025, with nearly 1 Mt directed to India. Chinese fertilizer export halt to India, while disruptive, accelerated India’s diversification efforts, with Russia and PhosAgro played a crucial role in stabilizing supplies. Of late, Chinese restrictions are expected to ease out by the end of August 2025 following diplomatic interventions so that supplies may resume shortly. India's push for alternate sources like West Asia and Europe strengthens its resilience. Ongoing geopolitical dynamics, including U.S. - China trade wars and EU sanctions on Russia, is likely to influence future trends.

In early 2022 India turned to Canada, Israel and Jordan. IPL agreed to buy 1.2 Mt of potash from Canada, 0.6 Mt from Israel and 0.3 Mt from Jordan for 2022 shipments. It also accelerated domestic restarts to raise urea output. Globally, fertilizer prices spiked after 2022 then eased by 2024 as new trade patterns emerged. Still, price volatility remains. Seasonal Indian tenders for urea/DAP/MOP can move world spot rates. For example, a large urea tender in February 2025 lifted Middle East urea FOB prices by $15–20/t.

Strategic Responses and Initiatives

To build resilience, India is diversifying supply and investing in capacity. New long-term contracts (with OCP/Morocco, SABIC/ Saudi Ma’aden) and expanded tendering to non-traditional sources (Africa, US, South America) aim to reduce concentration risk. The government also intends to build a strategic fertilizer reserve and also is trying to maintain comfortable port and plant stocks. Fertilizer PSUs typically hold only 30–45 days’ supply. Since 2022 the government was attempting to achieve urea self-sufficiency – achieving 90% by reviving idled plants and on public–private partnerships to increase NPK capacity. The Nutrient-Based Subsidy (NBS) scheme (implemented in 2010) fixes subsidies for P&K fertilizers, allowing market-linked pricing for DAP/MOP so that imports respond to demand signals. Initiatives like One Nation–One Fertilizer branding, expanded Direct Benefit Transfer (DBT) of subsidies, and promotion of nano-urea and custom NPK blends are also underway to optimize usage and support farmers.

India is increasingly viewing fertilizers as strategic input. Recent years have seen proposals to include fertilizer security in national planning, akin to oil stocks. On trade routes, the government is engaging diplomatically – for example seeking assurances from Gulf partners and exploring alternate corridors. It has also leveraged foreign policy to establish joint ventures in fertilizer mining (e.g. with Russia and Morocco) being pursued to secure raw materials. Russia, Canada and Belarus have large reserves of phosphates and potash. It is our natural choice to establish long term strategic tie up with these countries for the supply of critical fertilizer inputs. We may also be reminded that China too has only limited potash sources and is aggressively pursuing MoP imports to meet their demand.

Potash and Specialty Fertilizers

Worldwide, fertilizer markets are dominated by a few key regions: Morocco dominates phosphate, Canada/Russia/Belarus have large potash deposits and Middle-East/Asia producers dominate nitrogen. The global potash market in 2023 had a share of 42% for Canada and 20% for Russia. In same year, Russia increased its share of potash exports to India to 29% which helped to fill up demand gaps. Meanwhile, early this year China abruptly stopped exports of DAP and specialty fertilizers to India. However alternative sourcing from countries like Saudi Arabia, Morocco, Russia, and Jordan could help partly.

Specialty fertilizers (coated ureas, chelates, fortified products, water-soluble PKS) are the fastest-growing segment and are in much demand for specific crops. The global specialty fertilizer market is projected to grow from about $ 25 bn in 2022 to $ 63 bn by 2035. India is yet to make a dent into this area current requirements of these products are met by imports. China supplied 130–140 kilo tons of controlled-release fertilizer to India in 2024.

These global trends reinforce the need for strategic tie-ups. For example, Brazil, the US and China have used subsidies and trade policies (including export controls) to protect their agriculture, leading to cyclical price wars (as in potash pricing). India, by contrast, remains an open-market importer. The recent Calcutta High Court ruling also reaffirmed that fertilizers are a state subject, which may encourage state governments to also play a role in supply strategy (e.g. storage, local blending plants).

Holistic Nutrient Management and Sustainability

Beyond supply security, India is emphasizing efficient and balanced fertilizer use. Under the Soil Health Card programme (20 crore plus cards already issued), farmers receive crop-specific nutrient prescriptions to avoid waste and imbalances. The PM PRANAM scheme incentivizing states to reduce chemical nitrogen use via organic options and push for nano-urea and biofertilizers aim to lower over-reliance on imported nutrients.

IFFCO, some of the NGOs and research institutions are promoting integrated nutrient management – combining chemical fertilizers with organic manures, biofertilizers (Rhizobium, Azotobacter) and micronutrients – to maintain long-term soil fertility.

In summary, India’s fertilizer sector is at a crossroads of meeting growing demand for food with limited resources. The strategy combines securing diversified imports of N, P and K through long-term contracts and new trade links, expanding domestic capacity (especially for urea and custom NPKs), and improving nutrient efficiency (balanced usage, crops rotation, organic inputs). This multi-pronged approach is essential to buffer against future supply shocks and ensure that Indian agriculture remains fully fertilized – a prerequisite for sustainable food security and rural prosperity.

The ongoing geopolitical conflict in the Middle East has already led to volatility in the nitrogen market and steeper freight rates for vessels coming from that region. The prevailing uncertainty over geopolitical tensions and US trade tariffs on India on top of tight potash supply and robust demand from the other key demand regions render the situation complex.

Future outlook

The Prime Minister in his Independence Day speech on the ramparts of the Red Fort on the 15th August 2025 exhorted the youth, the industry, the private sector of the country, to fill the reserves of fertilizers, find new ways and prepare our own fertilizers as per the requirement of India and not depend on others. Will this clarion call usher a new era of development in the domestic fertilizer sector- capacity additions, increased nutrient efficiency, diligence in administration of nutrients and advance research in cutting edge innovations in nano fertilizers for controlled release of nutrients, targeted delivery nutrients, water soluble formulations for foliar applications, hybrid nutrient loaded products, and bio stimulants for plant growth specific to the Indian soil, remains to be seen.

(MP Sukumaran Nair was formerly Secretary to Chief Minister and Chairperson, Public Sector Restructuring & Audit Board, Government of Kerala.)