ALSO READGovt seeks urea imports as kharif demand soars
Imports are likely to increase further in the coming months as China has eased restrictions on fertilizer exports.
Surge in urea and DAP imports, potash declines
In the first four months of the current fiscal, imports of fertilizers varieties – DAP, urea and NPK rose by 35%, 22% and 22% to 1.98 MT, 1.24 MT and 1.26 MT respectively on year. However import of potash declined sharply by 67% to only 0.35 MT during April-July period of 2024-25 compared to previous year.
In the April-June period of the current fiscal, fertilizer imports had declined by 16.29% to 3.03 MT on year largely impacted by geopolitical reasons such as Israel-Iran and Ukraine-Russia conflict which hugely impacted import of fertilisers. Even China imposing restrictions on fertilizers exports also impacted supplies in India.
Out of the total annual consumption of 60 MT of fertilizers, 10 MT is imported.
Officials said that 87% of the total urea consumption of 35 MT is domestically produced
However India had to depend on imports for about 60% of its annual 10 – 11 MT of DAP consumption.. In addition, domestic manufacturing of DAP also depends on key raw materials ‘rock phosphate’ mostly imported from Senegal, Jordan, South Africa and Morocco.
While for potash, the country is entirely dependent on imports. India has signed a long term agreement for supply of about 2 MT of fertilizer annually from Russia, Israel, Belarus and Jordan.
Government steps up imports as subsidy bill rises
Meanwhile, the rise in urea consumption due to an increase in sowing of kharif crops has prompted the government to import key soil nutrients at the earliest.
Entities such as National Fertilizer and Indian Potash have floated tenders to import 2 million tonne (MT) of urea each, as the stock position of key soil nutrients supplied to farmers at the highly subsidised rate has declined sharply.
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Retail prices of phosphatic and potassic (P&K) fertilisers, including DAP were ‘decontrolled’ in 2010 with the introduction of a ‘fixed-subsidy’ regime as part of NBS mechanism announced twice annually.
Since March, 2018, the retail urea price has remained unchanged. The scheme allows retail prices of the key soil nutrient to farmers to be kept at 242 per bag of 45 kg, even as the current cost of production is around Rs 2,600/bag.
Due to rise in global fertiliser prices, fertiliser subsidy in FY25 was revised to Rs 1.91 lakh crore from budget estimate of Rs 1.68 lakh crore. For 2025-26 (BE), Rs 1.67 lakh crore has been allocated under fertiliser subsidy, which is likely to be revised because of higher global prices of DAP, urea and potash.