With easing global supplies and diversified imports, the landed cost of urea, India’s most consumed soil nutrient variant, has declined by around 60% to $390/tonne now, down from a peak of close to $1,000/tonne in April.
In a major boost to supplies in the coming rabi season, the Rashtriya Chemicals and Fertilizers (RCF), one of the three agencies entrusted with fertilizer imports, has finalised bids for imports of 1.7 million tonne (MT) of urea at a price range of $390/tonne – $393/tonne this month against the price range of $ 935/tonne – $959/tonne in April, 2026.
The National Fertilizers (NF) tender in June drew bids around $ 449/tonne for urea. The three agencies entrusted with imports for fertilisers – NF, RCF and Indian Potash – have so far released import orders of 4.2 MT of urea during April-July, 2026, out of which 3.5 MT has been delivered so far.
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In FY26, out of the total consumption of 40 MT of urea, about 10 MT was imported as finished product.
Officials said that with softening prices, the government will reassess the initial fertiliser subsidy budget projected at the beginning of the current fiscal year due to a price spike caused by the West Asia war. The government has spent over Rs 70,000 crore in 2026-27 so far under fertiliser subsidies which is 40% of the budget estimate of Rs 1.77 lakh crore due to the rise in global prices of soil nutrients since the West Asia war.
The actual subsidy is likely to be over Rs 15,000 – Rs 20,000 crore higher than the Rs 2.17 lakh crore incurred in FY25. This is still much lower than the department of Fertilisers’ internal estimate in the middle of the serious supply disruptions in April-May, which suggested the subsidy bill could spike to even Rs 3 lakh crore.
n FY26, expenditure on fertiliser subsidies was Rs 2.17 lakh crore – Rs 1.42 lakh crore for urea and Rs 74,999 crore for nutrient-based subsidy. This was a 17% increase over the revised estimate of Rs 1.86 lakh crore. This, according to officials, is due to the rise in fertiliser prices from March 2026.
Industry sources said that urea prices went up sharply since the beginning of the West Asia war as supplies of LNG, a key feedstock for urea manufacturing and finished products imports were severely disrupted because of conflict.
As part of its diversification plan, the government has started importing urea from several countries including Oman, Malaysia, Vietnam, Georgia, Nigeria, Russia, Finland, Egypt, Algeria, Turkey, and the Netherlands. Import of other variants di-ammonium phosphate (DAP) and NPKs were procured from Russia, Morocco, Egypt, USA, Jordan, South Korea, Tunisia, and Saudi Arabia via the Red Sea.
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According to the Department of Fertilisers, against the requirement of 11.88 MT of urea during April-July, 2026, the availability was 17.3 MT and sales of soil variants were over 10.7 MT. Similarly for DAP, against the requirement of 3.42 MT, 4.1 MT was available while sales were 2.54 MT.
Last time global conflict impacted the subsidy outgo was in FY23, when fertiliser subsidy was at a record Rs 2.54 lakh crore as shipping supplies through the red sea was impacted due to Ukraine-Russia conflict. India imports about 70% of its fertiliser and its raw material usage. Annual consumption of several variants of fertiliser in FY26 was over 70 MT.
TOPICSUreaThis article was first uploaded on August sixteen, twenty twenty-six, at nineteen minutes past seven in the evening. © The Indian Express (P) Ltd