The government must formulate a contingency plan for creating a strategic fertiliser reserve and protocol to strengthen preparedness against global supply disruptions, the parliamentary standing committee on chemicals and fertilisers said in a report.
The panel has recommended creating prescribed minimum opening stocking norms for major fertilisers at the national and state levels before each cropping season, advance procurement, gas allocation coordination with supplier countries and examining the feasibility of establishing a regional strategic reserve of highly import-dependent Diammonium Phosphate (DAP) and Muriate of Potash (MoP).
Geopolitical Vulnerabilities
It noted that recent geopolitical developments, including the West Asia crisis, highlighted the vulnerability of fertilizer supply chains to external disruptions affecting both imports and domestic production.
Currently, the Department of Fertilisers does not maintain a formal buffer stock policy; instead, it relies on the concept of opening stocks supported by dynamic supply planning and back-to-back imports.
The panel’s recommendation stems from the severe disruption of fertiliser variants and LNG, a key feedstock for urea production, following the closure of the Strait of Hormuz after the US-Iran conflict. To boost domestic supplies, India had to diversify its imports of finished fertilisers such as urea and DAP and purchased fertiliser variants from the spot market at much higher prices.
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It stated that the timely measures taken by the fertiliser department during the West Asia crisis—including advance import planning, coordination with Indian Missions abroad and gas allocation through the Empowered Committee on Pool Management—avoided a supply crunch of soil nutrients during the ongoing kharif season.
To prevent the diversion of highly subsidised fertiliser for non-agricultural use, the parliamentary committee suggested creating a joint monitoring mechanism with real-time input. It stated that there is large-scale diversion of subsidized neem-coated Urea for industrial use, particularly by plywood factories, resin manufacturing units, diesel exhaust fluid producers and cattle feed manufacturers.
In FY26, the government supplied over 70 million tonne (MT) of highly subsidised fertiliser variants – urea, DAP, MoP and NPKs – to farmers. The country imports about 70% of its fertilizer consumption and raw material usage.
The actual subsidy incurred in FY26 was Rs 2.17 lakh crore against a revised estimate of Rs 1.86 lakh crore, the subsidy outgo in FY27 is likely to be higher due to elevated global price levels for soil nutrients.
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While criticising the bundling of non-subsidy fertiliser products such as nano urea bottles with urea bags, the panel suggested a mandatory separate digital billing for non-subsidised products sold to farmers along with subsidised fertilisers.
Under the direct benefit transfer in fertilizers, the sale of subsidised fertilizers is made with due Aadhaar based verification of the beneficiary or farmer by companies
TOPICSFertilisersThis article was first uploaded on August seven, twenty twenty-six, at eighteen minutes past nine in the night. © The Indian Express (P) Ltd