India's domestic fertilizer production has experienced a significant decline following the Iran war, with 59.01 lakh tonnes produced between March 1 and April 26 this year, compared to 76.09 lakh tonnes during the same period last year. According to reports from The Hindu BusinessLine, even after adding an estimated 4-5 lakh tonnes output for the remaining days of April, total production for March-April is expected to reach only about 64 lakh tonnes, nearly 12 lakh tonnes lower year-on-year. The decline has been most pronounced in urea, the key nitrogenous fertilizer used widely during kharif season. Latest reports from The Economic Times confirm that urea production has dropped significantly due to West Asia conflict-related disruptions, with authorities addressing this by increasing LNG procurement and diversifying import sources.
Urea production has been severely impacted, dropping to 35.42 lakh tonnes this year from 46.67 lakh tonnes in March-April last year, representing a fall of over 24 per cent. As reported by The Hindu BusinessLine, industry sources attribute the decline mainly to disruption in liquefied natural gas (LNG) supplies, the primary feedstock for urea manufacturing, after the Iran war. The production shortfall is already being felt on the ground, with farmers in several regions beginning to queue up at fertilizer outlets earlier than usual to secure supplies before sowing begins. Latest government officials confirm that the situation remains 'very vulnerable' with domestic urea production impacted, though authorities are actively securing imports for April and May, crucial months for agricultural stocking. The crisis has become so severe that India is now purchasing urea fertilizer at significantly higher rates, with prices nearly 90% higher than before the conflict as reported by The Economic Times.
The government has launched an aggressive import strategy to address the fertilizer crisis, with India floating a global tender to import 50 million tonnes of NPK fertilizers and 35 million tonnes of ammonium sulphate to strengthen nutrient reserves ahead of the June sowing season. According to The Economic Times, India will import 64 lakh tonnes of urea and 19 lakh tonnes of other fertilizers for the upcoming kharif season, with global prices having doubled due to the West Asia crisis. Despite the production challenges, the government has sought to reassure farmers and State administrations, emphasizing that retail prices of major fertilizers remain unchanged. As reported by The Hindu BusinessLine, urea continues to be sold at ₹266.5 per 45-kg bag, DAP at ₹1,350 per 50-kg bag, and TSP at ₹1,300 per 50-kg bag. Officials noted that LNG supply to urea plants has improved to about 97 per cent of requirement after dropping to 50-60 per cent immediately following the war, with no major issues in the availability of key raw materials for producing urea and phosphatic fertilizers.
The fertilizer shortage is reflected in increased sales activity, with urea sales touching 8.53 lakh tonnes in April 1-17 this year, up from 7.71 lakh tonnes in the comparable period last year. According to The Hindu BusinessLine, sales of DAP, complex fertilizers and SSP have also risen noticeably as farmers stock up early. The government maintains that fertilizer availability remains 'strong, stable and well-managed', with total fertilizer stocks standing at 190.21 lakh tonnes as of April 27, equivalent to about 49 per cent of the estimated kharif 2026 demand. However, The Economic Times reports that India will import 64 lakh tonnes of urea and 19 lakh tonnes of other fertilizers for the upcoming kharif season, with global prices having doubled due to the West Asia crisis. The crisis has also led to India's fertilizer subsidy bill set to rise by 20% this financial year, driven by higher prices caused by the Middle East conflict.
The West Asia conflict has exposed India's heavy dependence on imported fertilizers, with the nation consuming nearly 33 million tonnes of fertilizers annually, making it imperative to reduce import dependence. As reported by The Economic Times, experts propose a multi-pronged approach using artificial intelligence and precision nutrient management, with initiatives like the Soil Health Card scheme being strengthened. The government is now pushing alternatives to chemical fertilizers after a 24.6% drop in output and supply disruptions linked to the Strait of Hormuz crisis, with plans for targeted action in high-use districts and aims to cut usage 25% by 2030 ahead of the crucial kharif season. The crisis has also prompted discussions about limiting sulphur exports as supplies tighten, with industry groups raising alarms about rising prices and supply chain issues. ICRA warns that India's agriculture sector may face a challenging year ahead amid concerns over weak monsoon, possible El Nino conditions, and fertilizer supply risks linked to the West Asia conflict, with the Reserve Bank of India's Monetary Policy Committee highlighting that the West Asia conflict poses significant downside risks to India's growth and upside risks to inflation.
