4 min readNew DelhiUpdated: Mar 30, 2026 09:08 PM IST
India currently has sufficient stocks of fertilizers vis-à-vis last year, and efforts are on to diversify sourcing to reduce dependence on West Asia, which has traditionally accounted for 20-30% of India’s urea and diammonium phosphate (DAP) imports, a senior government official said Monday. Meanwhile, the natural gas supply to fertilizer units, which had dipped to 60% earlier amid the West Asia war, has now increased to 75-80% primarily through additional LNG procurement from the spot market. The spot purchases are being made at significantly higher price than the pre-war period due to the global price surge, and could increase the government’s fertilizer subsidy bill as urea and DAP sales are continuing at regulated prices despite significantly higher prices in the international market.
The country’s overall fertilizer requirement for the upcoming Kharif season is estimated at 390 lakh tonnes, compared to the 361 lakh tonnes actually sold last year. April and May are usually utilized as lean months to proactively build up fertilizer stocks for Kharif sowing. According to Department of Fertilizer Additional Secretary Aparna Sharma, the current fertilizer stocks in the country stand at 180 lakh tonnes, significantly higher than 147 lakh tonnes available at the same time last year.
On procurement of LNG from the spot market, she said that recent LNG purchases have happened at around $19.5 per million British thermal units (mBtu), up nearly 70% from $11-12 mBtu before the war began. The monthly requirement of natural gas for fertilizer units is around 52 million standard cubic metres per day (mscmd), of which 15 mscmd is coming from spot purchases; the remaining supplies are from long-term LNG contracts and domestically produced natural gas. As per the revised estimates for 2025-26, fertilizer subsidy for the year is pegged at 1.86 lakh crore, up from the original budget estimate of 1.68 lakh crore. The budget estimate for 2026-27 is Rs 1.71 lakh crore. For 2025-26, the government sought the parliament’s approval to spend an additional Rs 19,230 crore for fertilizer subsidy.
The final outgo could be even higher, and further spiral in the coming financial year, considering the consequences of the ongoing West Asia war. The global fertilizer market has witnessed a sharp increase in prices of inputs including LNG, Ammonia and Sulphur, along with higher freight and logistics costs. Sharma, while saying that there could be an impact on fertilizer subsidy bill, said that urea and DAP sales continue at government-regulated prices. Farmers will continue to get urea at Rs 266 per 45 kg and Rs 1,350 for 50 kg bag of DAP.
Domestic production of Urea was initially impacted by a modification in gas allocation priorities, causing a production drop of 30,000 to 35,000 tonnes per day. However, recovery efforts are underway. With the additional LNG coming from the spot market, urea production has increased by 12,000–15,000 tonnes per day, reducing the monthly production loss from 9–10 lakh tonnes to around 6–7 lakh tonnes. Domestic urea production in March stood at around 18 lakh tonnes, down from 24.78 lakh tonnes, as per data provided by the government.
Currently, 27 urea plants are receiving natural gas, while others that were under annual maintenance shutdowns are in the start-up mode. According to Sharma, oil refineries have been directed to ensure the full supply of sulfur and other intermediates required for domestic fertilizer production.
The government has also stepped up efforts to diversify fertilizer sourcing and secure supplies. A global tender for 13.07 lakh tonnes of urea has been floated, and long-term supply arrangements have been tied up with countries like Saudi Arabia and Oman. “Proactive measures are being taken to diversify sourcing from other than Gulf countries, including Russia, Morocco, Australia, Indonesia, Malaysia, Jordan, Canada, Algeria, and Egypt,” Sharma said.
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