While the government is aiming to cut urea and diammonium phosphate (DAP) consumption through introduction of nano-variants, sales and imports of varieties of fertilizers have surged significantly, trade sources said.
Data for April-December, 2025-26 also indicate a decline in domestic production of fertilisers compared to the same period in the previous fiscal.
In the first three quarters of the current fiscal, domestic production of urea and DAP dclines by 3.2% and 3.9% to 22.4 MT and 3 MT respectively.
Surging Import Volumes
Sales of urea due to rise in the demand in kharif as well as rabi season rose by 3.8% to over 31 MT in April-December, FY26 on year.
Urea imports surged 85% to close to 8 MT in the period while inward shipments of DAP rose 45% at 6 MT in April-December, FY26 on year.
NPK (nitrogen, phosphorus, potassium) fertilizer imports rose by 121% during the April-December, 2025-26 to 3.29 MT.
This comes after the fertilizer ministry recently stated that nearly 73% of the country’s requirement of soil nutrients was met through domestic production in 2025.
The domestic production of fertilisers — urea, DAP, NPK and single super phosphate (SSP) — rose to 52.46 MT in 2025 from 50.95 MT in 2024, according to the ministry.
“The growth in domestic production has been driven by the establishment of new fertiliser plants, revival of previously closed units, promotion of indigenous manufacturing, and assured availability of raw materials,” according to the recent official statement.
While new urea plants are being set up at – Talcher (additional one million tonne), Assam (1.2 MT) and Russia (Ural Chem, 1.8 – 2 MT), it may take a while for supplies to commence, trade sources said.
Global Market Impact
The requirement of import of urea and LNG, a key feedstock for the soil nutrient, is also largely dependent on import dependence and fluctuations in global prices push up fertilizer subsidies.
India imports 20% of its urea requirement, while two-thirds of DAP consumption is met via imports.
Domestic manufacturing of DAP also depends on key raw materials ‘rock phosphate’ mostly imported from Senegal, Jordan, South Africa and Morocco.
The country depends on imports of the muriate of potash.
Overall imports of soil nutrients are projected to increase by over 41% to over 22.3 MT in FY26 due to a surge in domestic demand, according to industry estimates.
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 FY25, the world’s second-largest consumer of fertilisers imported 16 MT of soil nutrients.
In FY25, the government’s urea subsidy spending was Rs 1.91 lakh crore. In FY26, fertiliser subsidy is projected at around Rs 1.95 lakh crore against the Budget estimate of Rs 1.67 lakh crore.