India imports 25.08 lakh tonnes of urea, 7.11 lakh tonnes of DAP in Q1
India imported 25.08 lakh tonnes of urea and 7.11 lakh tonnes of Di-Ammonium Phosphate (DAP) during the first quarter (April–June) of the current financial year, according to government data.
Domestic production over the same quarter stood at 115.72 lakh tonnes of total fertiliser, including 71.55 lakh tonnes of urea and 9.84 lakh tonnes of DAP.
The Ministry of Chemicals and Fertilizers, through the Department of Fertilizers, is diversifying import sources — engaging with Indian missions abroad to add suppliers such as Saudi Arabia, Russia, Belgium, Egypt, Morocco, Germany and the USA — to reduce dependence on any single country and mitigate global supply-chain disruption risks.
Long-term commercial supply arrangements have been facilitated between Indian fertiliser companies and overseas suppliers, including agreements for roughly 31 lakh tonnes of DAP annually from Saudi Arabia and about 26.5 lakh tonnes of DAP/NPK annually from Russia.
The measures are intended to strengthen fertiliser security for the agricultural season and cushion farmers from global price and supply volatility.
Fertiliser Subsidy Architecture — Urea (Price Control) vs Nutrient-Based Subsidy
India runs two distinct subsidy regimes for fertilisers. Urea remains under statutory price control — its Maximum Retail Price (MRP) is fixed by the Centre, and the gap between the delivered cost to farmers and the manufacturer/importer's realisation is paid as subsidy. Phosphatic and Potassic (P&K) fertilisers, including DAP, are covered instead by the Nutrient Based Subsidy (NBS) scheme, in force since 1 April 2010, under which a fixed per-nutrient subsidy (for Nitrogen, Phosphorus, Potash and Sulphur) is announced annually/bi-annually, while the MRP itself is decontrolled and set by companies.
Key Details
- NBS scheme administered by the Department of Fertilizers, Ministry of Chemicals and Fertilizers, effective since 1 April 2010.
- Objective: correct skewed N-P-K-S application (urea over-use) by aligning subsidy with actual nutrient content rather than product type.
- Urea alone remains outside NBS and under direct price control due to its politically sensitive, high-volume use by small farmers.
The imported urea and DAP volumes reported this quarter enter this same dual-subsidy pipeline — urea imports are cost-absorbed under price control, while imported DAP pricing interacts with the NBS-linked subsidy rates announced for the season.
Fertiliser Import Diversification and Strategic Supply Security
India is structurally import-dependent for key fertiliser inputs — nearly all its Potash (MOP) and a large share of Phosphatic raw material/finished fertiliser needs are imported, alongside a residual urea import requirement despite domestic capacity expansion. Historically concentrated sourcing (e.g., China for water-soluble fertilisers) has pushed the government to negotiate long-term government-to-government or PSU-to-supplier arrangements to lock in volumes and reduce price-shock exposure, an approach that mirrors India's broader strategy on critical mineral and energy import diversification.
Key Details
- Russia's share of India's total fertiliser imports rose from about 7.7% in 2017-18 to nearly 27% in 2023-24, making it a leading supplier alongside traditional partners like Saudi Arabia, Jordan, Morocco and China.
- Long-term supply agreements (this quarter: ~31 lakh tonnes/year DAP from Saudi Arabia; ~26.5 lakh tonnes/year DAP/NPK from Russia; ~4.8 lakh tonnes/year MOP from Russia, Germany and Turkmenistan) aim to convert volatile spot purchases into predictable annual commitments.
- Diversification is also driven by geopolitical disruption risk, illustrated by past incidents of fertiliser-carrying vessels needing safe passage through chokepoints such as the Strait of Hormuz.
The Q1 import figures and the named agreements with Saudi Arabia and Russia are the operational expression of this diversification strategy, aimed at insulating India's kharif and rabi fertiliser supply from single-source disruption.
WTO Agreement on Agriculture — Domestic Support and Subsidy Classification
Fertiliser subsidies are a form of input subsidy counted under the WTO Agreement on Agriculture's domestic support framework. Input subsidies targeted at low-income or resource-poor farmers in developing countries are generally exempt from reduction commitments under Article 6.2 (a "Green Box"-adjacent developmental provision), which India has historically invoked to defend its fertiliser subsidy bill from WTO scrutiny, alongside its Minimum Support Price (MSP) procurement operations.
Key Details
- WTO domestic support is classified into Green Box (non/minimally trade-distorting, unlimited), Blue Box (production-limiting, permitted), and Amber Box (trade-distorting, subject to reduction commitments/de minimis limits).
- Developing countries get a higher de minimis exemption (10% of value of production) for both product-specific and non-product-specific support compared to developed countries (5%).
- India has consistently sought a permanent solution for public stockholding and input subsidies at the WTO, given the scale of its fertiliser and food subsidy programmes.
The scale of urea and DAP imports and the accompanying subsidy outlay feed directly into India's Amber Box/Article 6.2 calculations reported to the WTO, linking this routine trade data to India's long-running multilateral negotiating position on agricultural subsidies.
- Q1 (April–June) imports: 25.08 lakh tonnes urea, 7.11 lakh tonnes DAP.
- Q1 domestic production: 115.72 lakh tonnes total fertiliser (71.55 lakh tonnes urea, 9.84 lakh tonnes DAP).
- Long-term supply commitments: ~31 lakh tonnes/year DAP from Saudi Arabia; ~26.5 lakh tonnes/year DAP/NPK from Russia; ~4.8 lakh tonnes/year MOP from Russia, Germany and Turkmenistan.
- NBS scheme in effect since 1 April 2010 for P&K fertilisers; urea remains under direct price control.
- Russia's share of India's fertiliser imports: ~7.7% (2017-18) rising to ~27% (2023-24).
- Nodal ministry: Ministry of Chemicals and Fertilizers, through the Department of Fertilizers.