With an encouraging trend in winter crops sowing and robust monsoon rains, imports of urea, di-ammonium phosphate (DAP) and NPK variants of soil nutrients, have surged in the first eight months of the current fiscal year.
Surge in shipment also indicates the government’s thrust to ensure adequate supply of fertilisers in the ongoing rabi or winter season, but it may have implications for the subsidy bill.
Shortage of Urea
In the last kharif season, shortage of urea was reported from some parts of the country, as the production and imports could not match the demand, which spiked over 5% on year. According to industry sources, the total volume of import of all varieties of fertilisers — urea, DAP, NPK (nitrogen, phosphorus, and potassium) and muriate of potash (MOP) — rose 60% to 17.37 million tonne (MT) during April-November of 2025-26 compared to same period in the previous fiscal.
Prices have however remained stable in the last one year, despite geopolitical churns, a factor that will help put a lid on the subsidy bill.
India imports 20% of its urea requirement, while two thirds of DAP consumption is met via imports. MoP is totally imported. Overall import of soil nutrients is projected to increase by over 41% to over 22.3 million tonnes (MT) in the 2025-26 due to a surge in domestic demand, according to industry estimates.
In FY25, the world’s second largest consumer of fertilizers, imported 16 MT of soil nutrients of all variants. The imports of urea and DAP have soared by 120% and 54% to 7.17 MT and 3.25 MT respectively in the first eight months of FY26 compared to the same period in 2024-25.
Import of NPK variants
Import of NPK variants of soil nutrients rose by close to 100% to 2.71 MT in April-November, 2025-26 on year while only MOP import fell by 25% to 1.95 MT in the first eight months of the current fiscal. In FY25, urea import is likely to touch 10 MT, against the sales of 40 MT. In FY25, against the sales of 38 MT, the domestic production was around 30.6 MT and imports were 5.7 MT leading to supply disruption.
The government supplies around 60-65 MT of highly subsidised fertilisers annually to farmers out of which around 25% to 30% is met through imports. In 2024-25, the government’s urea subsidy spending was Rs 1.91 lakh crore. In the current fiscal, fertilizer subsidy is projected at around Rs 1.95 lakh crore against a budget estimate of Rs 1.67 lakh crore.
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.
Since 2012, the retail urea price has been Rs 242 per 45 kg bag, even as the cost of production is over Rs 2,600 a bag.
While the government covers the cost difference via subsidy to the manufacturers, the low retail price has led to overuse of urea, leading to decline in soil health.
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.