Rising reliance on overseas fertiliser supplies raises concerns over self-sufficiency, subsidy burden, and supply-chain risks
New Delhi (Economy India): India’s urea imports more than doubled during the first eight months of the current financial year, underscoring the country’s growing dependence on foreign supplies to meet domestic fertiliser demand amid a decline in local production.
According to data released by the Fertiliser Association of India (FAI), urea imports during April–November 2025-26 surged 120.3 per cent year-on-year to 7.17 million tonnes (71.7 lakh tonnes), compared with 3.26 million tonnes in the corresponding period of the previous year.
The sharp rise highlights mounting pressure on India’s fertiliser ecosystem, particularly as farmers’ demand remains robust while domestic output struggles to keep pace.
Domestic Production Decline Triggers Import Surge
Industry experts attribute the spike in imports primarily to lower domestic urea production, caused by a combination of factors including:
- Temporary shutdowns of urea plants for maintenance
- Feedstock supply constraints, particularly natural gas
- Delays in capacity stabilisation at some recently revived units
- Rising energy costs impacting production economics
FAI data indicates that domestic output during the period fell short of consumption needs, forcing the government to step up imports to ensure uninterrupted availability for farmers, especially during the critical kharif and rabi seasons.
Government Steps In to Ensure Adequate Supply
Given urea’s strategic importance to Indian agriculture, the central government has traditionally intervened aggressively to prevent shortages, even if it means higher import dependence.
Officials said imports were ramped up to:
- Prevent supply disruptions during peak sowing seasons
- Avoid price volatility at the farm gate
- Maintain buffer stocks across states
- Support foodgrain production targets
India continues to regulate urea prices heavily, selling it to farmers at a subsidised rate, with the government compensating manufacturers and importers through fertiliser subsidies.
Subsidy Burden Likely to Rise
The jump in urea imports is expected to increase the fertiliser subsidy burden, especially at a time when global urea prices remain volatile due to:
- Geopolitical tensions
- Energy price fluctuations
- Supply disruptions in key exporting countries
Higher imports at elevated international prices could push subsidy outgo higher in the second half of the financial year, analysts said.
“Any sustained increase in import dependence directly impacts the subsidy bill, given India’s administered pricing mechanism for urea,” a fertiliser industry executive said.
Strategic Concerns Over Import Dependence
The rising reliance on imported urea has renewed concerns about India’s long-term fertiliser security, particularly in the context of global supply shocks.
India currently imports urea mainly from countries such as:
- Oman
- Saudi Arabia
- Qatar
- Russia
- China (intermittently)
Disruptions in any of these supply routes could pose risks to domestic availability, making self-reliance a key policy priority.
Policy Push for Self-Reliance Faces Challenges
Over the past decade, the government has launched several initiatives to reduce import dependence, including:
- Revival of closed urea plants in eastern India
- Promotion of nano urea as an alternative
- Long-term gas supply agreements
- Encouraging energy-efficient production technologies
While these measures have helped stabilise output in recent years, the latest data suggests that structural challenges persist.
Experts say achieving full self-sufficiency will require:
- Stable and affordable natural gas supplies
- Faster commissioning and ramp-up of new capacities
- Greater adoption of alternative fertilisers
- Improved nutrient-use efficiency at the farm level
Impact on Farmers and Agriculture
For farmers, uninterrupted availability remains the top priority, particularly as fertiliser use directly affects crop yields and food security.
While higher imports help avoid shortages, analysts caution that:
- Any delay in shipments could affect sowing schedules
- Global price spikes could strain government finances
- Long-term sustainability requires demand-side reforms
Promoting balanced fertiliser use and reducing over-dependence on urea remain critical challenges for policymakers.
Outlook for the Remainder of FY26
Looking ahead, analysts expect urea imports to remain elevated in the coming months unless domestic production improves significantly.
Key factors to watch include:
- Operational performance of domestic urea plants
- Global urea price trends
- Government procurement strategy
- Progress in alternative fertiliser adoption
FAI officials noted that ensuring timely availability for farmers will remain the government’s top priority, even if it necessitates higher imports in the short term.
India’s more-than-doubling of urea imports in April–November reflects the complex balancing act between ensuring fertiliser availability, controlling subsidy costs, and pursuing self-reliance. While imports provide a short-term solution, experts stress that sustained policy reforms and production stability are essential to reduce vulnerability to global market disruptions.
(Economy India)
