86 LMT secured through international agreements, P&K output rises to 211 LMT; strict enforcement curbs black marketing as Centre balances supply, prices, and reform

Against the backdrop of an increasingly volatile global commodity landscape, the Government of India has undertaken a calibrated and multi-layered approach to secure fertiliser availability, combining import diversification, domestic capacity expansion, and tighter regulatory enforcement. The strategy reflects a shift from reactive supply management to a more anticipatory and resilience-oriented framework aimed at insulating Indian agriculture from external shocks.

Comfortable Stocks Despite Global Volatility

Official data underscores a position of relative strength in fertiliser availability across both the Kharif 2025 and ongoing Rabi 2025–26 seasons, even as global markets remain unsettled. The Centre has ensured that supplies of key nutrients—urea, DAP, MOP, and NPKS—have remained adequate across major agrarian states such as Madhya Pradesh, Uttar Pradesh, Bihar, and Haryana, with no significant disruptions reported at the aggregate level.

Between October 1, 2025, and March 5, 2026, availability figures consistently outpaced pro-rata seasonal requirements, indicating a deliberate front-loading of supplies. Urea availability reached 235.33 LMT against a requirement of 183.51 LMT, providing a substantial buffer reflected in closing stocks of 49.01 LMT. DAP availability stood at 71.89 LMT against 51.38 LMT requirement, leaving a stock position of 21.61 LMT.

Similarly, MOP availability at 18.18 LMT exceeded its requirement of 14.18 LMT, while NPKS availability at 108.41 LMT significantly surpassed the requirement of 76.48 LMT, culminating in a robust closing stock of 45.51 LMT. Sales figures have tracked demand closely, suggesting efficient last-mile distribution and minimal leakages at the national level.

This surplus positioning is particularly critical in the context of geopolitical uncertainties, as it provides a time buffer for policymakers to respond to any emerging supply disruptions without immediate stress on farmers.

Strategic Shift Away from China

A defining feature of India’s evolving fertiliser strategy is the conscious recalibration of import dependencies. The sharp decline in DAP imports from China—from 22.28 LMT in 2023–24 to 8.47 LMT in 2024–25—signals a decisive move to reduce reliance on a single dominant supplier, especially amid shifting geopolitical alignments and trade frictions.

To offset this decline, India has actively pursued long-term supply arrangements with a diversified set of partners. Annual agreements now ensure supplies of 31 LMT from Saudi Arabia, 30.10 LMT from Russia, and 25 LMT from Morocco, cumulatively amounting to 86 LMT. These agreements not only secure volumes but also provide a degree of price and supply predictability, insulating the domestic market from short-term volatility in international spot markets.

This diversification strategy reflects a broader geopolitical-economic calculus—spreading risk across multiple regions while strengthening bilateral trade ties with resource-rich nations.

Domestic Production Gains Momentum

Complementing import diversification is a sustained push to expand domestic production capacity, particularly in phosphatic and potassic fertilisers, where India has historically been import-dependent. The increase in domestic P&K production from 159.54 LMT in 2014–15 to 211.22 LMT in 2024–25 illustrates the cumulative impact of policy support, investment incentives, and regulatory reforms over the past decade.

A key driver has been the strengthening of the Nutrient Based Subsidy framework, including the expansion of covered fertiliser grades from 22 to 28, thereby encouraging product diversification and balanced nutrient application. The recognition of new and expanded manufacturing capacities under the subsidy regime has further incentivised private sector participation and capacity augmentation.

In addition, the continuation of freight subsidies for Single Super Phosphate has played a critical role in enhancing the viability and competitiveness of domestically produced phosphatic fertilisers. The provision of Rs 3,500 per metric tonne as additional financial support for domestic DAP production has further strengthened local manufacturing economics, particularly in the face of high import costs.

The government’s promotion of SSP as a low-cost, indigenous substitute for DAP—especially in fortified forms enriched with micronutrients such as zinc, boron, and other trace elements—reflects a nuanced approach that combines cost efficiency with soil health considerations.

Regulatory Tightening: Crackdown on Malpractices

Supply adequacy alone does not guarantee equitable access, and the government has accordingly intensified enforcement mechanisms to address distortions in fertiliser distribution. Fertilisers continue to be regulated under the Essential Commodities Act 1955 and the Fertilizer Control Order 1985, which empower state governments to monitor, regulate, and penalise irregular practices.

In Uttar Pradesh, enforcement actions have been particularly stringent, with 52 FIRs registered in cases of black marketing and seven FIRs filed against instances of forced tagging, where fertilisers are bundled with unrelated products, effectively distorting market access for farmers. The issuance of a specific state order on January 9, 2026, to curb such practices further underscores the administrative focus on ensuring transparency and fairness in fertiliser distribution.

These measures are critical in preserving the integrity of the subsidy regime, ensuring that benefits reach intended beneficiaries without diversion or exploitation.

Balancing Act: Supply Security vs Structural Reform

India’s fertiliser policy today operates within a complex matrix of competing priorities—ensuring uninterrupted supply, maintaining price stability for farmers, managing fiscal burdens, and advancing long-term structural reform. While the current strategy has succeeded in creating a buffer against immediate disruptions, it also highlights the inherent tensions within the system.

The reliance on subsidies, while necessary for affordability, imposes a significant fiscal cost, particularly in periods of elevated global prices. At the same time, import dependence—though being gradually reduced—continues to expose the system to external risks.

The policy response, therefore, reflects a dual-track approach: stabilising the present through imports and subsidies, while investing in the future through domestic capacity building, diversification, and the promotion of alternative fertilisers.

Conclusion

India’s fertiliser landscape is undergoing a subtle but significant transformation. The combination of strategic imports, rising domestic production, and tighter regulatory oversight has, for now, ensured a stable supply environment despite global uncertainties.

However, the true test of this framework will lie in its ability to sustain resilience over the long term. As geopolitical risks persist and demand pressures grow, India’s challenge will be to transition from a system anchored in external dependence and fiscal support to one driven by self-reliance, efficiency, and sustainability—without compromising the foundational goal of securing the nation’s food systems.

— Suchetana Choudhury (suchetana.choudhuri@agrospectrumindia.com)