Why the Iran War Did Not Trigger a Fertiliser Crisis in India

PRERNA FOR IAS

         Mehnat Aapki, Guidance Humari

         Roz ki Prelims Practice — Experts ke Saath

Why the Iran War Did Not Trigger a Fertiliser Crisis in India

Background and History

The Iran–Israel conflict and the effective closure of the Strait of Hormuz in 2026 created one of the most severe global energy supply disruptions in recent decades. Since the Strait is a major route for liquefied natural gas (LNG), ammonia, sulphur, and fertiliser shipments, there were widespread concerns that India would face an acute fertiliser shortage. India is heavily dependent on imported LNG for urea production and on imports of phosphatic and potassic fertilisers and their raw materials. However, unlike previous global supply shocks, India successfully avoided a major fertiliser crisis through timely government intervention and efficient supply-side management.

India's Fertiliser Requirement and Consumption

India is the world's second-largest consumer of fertilisers due to its large agricultural sector. Annual fertiliser consumption exceeds 650 lakh tonnes, with urea accounting for nearly 60% of total usage. During April–June 2026, urea sales remained stable at 69.33 lakh tonnes, while DAP, MOP and complex fertiliser consumption also remained broadly unchanged despite global disruptions. Fertiliser demand was further moderated by an El Niño-induced deficient monsoon, which reduced kharif sowing and lowered fertiliser offtake.

Future Demand and Diversification

India's fertiliser demand is expected to increase steadily due to rising food demand, population growth, and greater cropping intensity. Recognising geopolitical risks, the Government diversified LNG imports away from Qatar and the UAE towards the United States, Oman, Nigeria, Angola, Indonesia, Trinidad & Tobago, Norway, and the Republic of the Congo. State agencies also imported substantially larger quantities of urea to maintain buffer stocks and ensure uninterrupted availability.

Domestic Production, Deficiency and Import Substitution

Domestic urea production recovered strongly after an initial decline, increasing from 67.88 lakh tonnes (April–June 2025) to 71.53 lakh tonnes (April–June 2026). Urea imports also rose sharply from 8.38 lakh tonnes to 25.08 lakh tonnes, preventing shortages. However, India continues to face significant dependence on imports for DAP, MOP, phosphoric acid, sulphur and ammonia, where rising international prices remain a concern. Going forward, India must accelerate import substitution by expanding domestic production of phosphatic fertilisers, developing alternative sources of raw materials, encouraging balanced nutrient use, and strengthening strategic reserves. These measures will enhance fertiliser security and reduce vulnerability to future geopolitical disruptions.