To reduce the impact of global fertiliser price fluctuations due to geo-political factors, the Parliamentary Standing Committee on Chemicals and Fertilisers on Monday recommended more long-term agreements and joint venture projects with countries rich in raw materials, especially for phosphorus (P) & potassium (K).
It also suggested establishing production facilities abroad with buy back arrangements.
“The dependence exposes the country to global market shocks, exchange rate fluctuations and delicate geo-political situation which also affect the optimal operation of fertilizer plants to their installed capacity,” the panel noted in its report submitted in Lok Sabha.
The committee recommended that the government build a strategic partnership to access fertilizer raw materials abroad, securing regular resource access and supply chain stability for timely supply at the most competitive rates, thereby avoiding price volatility.
It also urged the Department of Fertilisers to own phosphate mines abroad especially in Jordan, Morocco and South African countries for seamless fertiliser supply. The panel also expressed concern that the country’s fertiliser production capacity has not kept pace with demand, leading to higher imports of soil nutrients.
India imported 28 million tonnes (MT) of fertilisers against total consumption of over 70 MT in FY26. Last fiscal, while 10 MT of urea imported out of total consumption of 40 MT, about 80% of feedstock – LNG – used in manufacturing of key soil variants were imported.
The panel has noted that India, the second largest consumer and third largest producer of various variants of fertiliser, has so far achieved 80% self-sufficiency in production capacity in urea. However, the panel stated that it is a matter of concern that about 90% of gas or LNG requirement of urea manufacturing is met through imports.
In the case of Di Ammonium Phosphate (DAP), about 50-60% of domestic requirements are met through imports while the country entirely depends on imports for Potash.
It also argued against bringing urea under the nutrient based subsidy regime where prices would be determined by manufacturers based on demand and supply and possible higher prices would be fixed by the manufacturers. “Urea bags which are available to the farmers @ Rs.242 (a 45 kg bag) would cost more and prove detrimental to the interest of the farmers,” the panel observed.