To address the persistent complaint of the US regarding its merchandise trade deficit with India, New Delhi is looking at ramp up sourcing of fertilisers from the world’s largest economy. The move follows a plan announced by prime minister Narendra Modi’s visit to Washington in February, to raise imports of LNG from the US.

Natural gas is the feedstock for production of urea, the most commonly used fertiliser India which also accounts for 70% of the fertiliser subsidy bill.

India even now imports some fertilisers from the US but its share in overall imports is very low at $ 29 million out of the total imports of $8.29 billion in 2024-25.

The biggest sources of fertiliser imports for India are Russia, Saudi Arabia, Oman, China and Morocco.

In the last fiscal, imports from Russia were $ 1.84 billion and from China $ 0.88 billion. Shipments from both these sources declined in 2024-25.

However, supplies from Saudi Arabia, Oman, and Morocco rose by 32.4%t, 54.9% and 32.9% to $ 1.48 billion, $1.07 billion and $ 0.81 billion respectively in 2024-25.

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India’s overall fertiliser imports in 2024-25 dipped by 7.16% to $ 8.29 billion in 2024-25 from $ 8.92 billion in 2023-24 and $ 15.32 billion in 2022-23. The decline has been largely due to lower international prices of the commodity.

In the discussions on the Bilateral Trade Agreement (BTA) India can offer to cut duties on fertilizers that range from 2.5% to 5% depending on the type of the fertiliser and whether it comes as a raw material or finished good.

India imports significant quantities of various fertilizers, including urea, DAP (Di-ammonium Phosphate), and MOP (Muriate of Potash).

Approximately 20% of urea, 50-60% of DAP, and 100% of MOP are imported. Besides urea, DAP, and MOP, India also imports other fertilizers like NPK compounds and raw materials like phosphate rock and sulphur for DAP production.

To be sure, because of higher domestic production, India’s imports of urea has declined in recent years. Focus on nano urea consumption and the start of a new large urea plant at Talcher could lead to elimination of imports in two-three years, according to government sources. Of course, natural gas, the expensive feedstock, would still need to be imported in large quantities as LNG, as domestic production of the hydrocarbon isn’t growing fast enough.