The crises in Ukraine and Gaza have raised concerns about increases in the prices of components used for making petroleum-based chemical fertilisers.

India’s Fertiliser Imports at Risk Amid Geopolitical Uncertainty

• Dependency on Imports: India relies heavily on imports to meet its fertiliser demands, particularly for urea, DAP, and MOP.
  • Around 20% of urea, 50-60% of DAP, and 100% of MOP are imported.
• Import Sources Affected: India’s primary fertiliser imports come from countries like Russia, China, Saudi Arabia, and the UAE. 
• • Current geopolitical instability could disrupt supplies from these regions.

What is meant by the term “balanced fertilisation”?

• It is the practice of applying nutrients such as  Nitrogen, Phosphate and Potash at the right time in the right amount according to the soil type and specific crop. 
• It is significant as it improves soil quality, increases crop yield, curtails environmental impact,and protects the environment. 

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Fertilizer Industry in India

• This industry is one of the core industries. 
• Fertilisers are essential for enhancing crop yields and improving soil fertility. 
• India is the second-largest consumer of fertilisers globally.
• Production: India ranks third in the world for overall fertiliser production, second in nitrogen fertilisers, and third in phosphate fertilisers
  • There are 57 fertiliser units in India, including 29 urea-producing units and 9 ammonia sulphate-producing units

Fertiliser Production in India

• 2021-22 Production vs. Demand: India consumed 579.67 lakh metric tonnes (LMT) of fertilisers, including 341.73 LMT of urea. However, domestic production was only 435.95 LMT, leaving a shortfall of 143.72 LMT.
• Comparative Data: In 2014-15, fertilizer production was 385.39 LMT, indicating only a 50 LMT increase over seven years.
• Subsidy Allocation: The 2023-24 budget allocated ₹1.79 lakh crore for fertilizer subsidies, with a significant share (₹1.04 lakh crore) directed toward indigenous urea.

Urea Continue to be the major Fertiliser: reasons

It is popular fertiliser for many reasons

• High Nitrogen Content: Urea has high high nitrogen content around (46%).
  • Nitrogen is very significant for plant growth.
• Less harmful: Urea is less harmful to soil than other fertilisers.
• Low cost: This nitrogenous fertiliser is affordable due to its low transport and storage costs. 
• Wider availability: Urea is easily available due to its wider access to the market. 
• Suitable for various crops and soil type: This fertiliser can be used directly to the soil on a wide crops such as cereals, vegetables, and fruits.

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Challenges India Faces in Fertilizer Imports

• High Dependence on Imports
  • India relies heavily on imported fertilisers like urea, DAP (Diammonium Phosphate), and MOP (Muriate of Potash).
  • This dependence makes India vulnerable to disruptions in global supply chains and price volatility.
• Impact of Geopolitical Conflicts
  • Conflicts in regions like Ukraine and West Asia affect the availability and cost of raw materials required for fertiliser production.
  • For example, the ongoing crisis in Ukraine has led to rising prices of petroleum-based inputs crucial for fertilisers.
• Limited Global Suppliers
• • With only a few suppliers for essential raw materials such as rock phosphate, phosphoric acid, and ammonia, India has limited bargaining power in the global market.
• Subsidy Burden
  • The high cost of imported fertilisers significantly increases the government’s subsidy expenses.
  • For instance, the subsidy required for imported urea is notably high, putting a strain on the national budget.
• Domestic Production Shortfall
  • India’s production capacity for fertilisers does not meet the national demand, creating a shortfall that must be supplemented through imports.
• Supply Chain Disruptions
  • Global supply chain issues, often triggered by geopolitical tensions, result in delays and shortages in fertilizer imports.

Recommendations

• Enhance Production Capacity: Increase domestic fertiliser production and reduce dependency on imports.
• Adopt New Practices: Implement nano urea, natural farming, and improve fertilizer factory capacities.
• Policy Initiatives: Encourage investments in public, cooperative, and private sectors for manufacturing and marketing fertilisers.
• Integrated Nutrient Management (INM):
  • It  is a comprehensive strategy that aims to optimize nutrient supply to crops while preserving soil health. 
    • By combining various nutrient sources, INM promotes sustainable agriculture and reduces reliance on chemical fertilizers.
• Key Components of INM:
  • Inorganic Fertilisers: Chemical fertilisers, including urea, DAP, MOP, and micronutrients, provide a quick source of essential plant nutrients.
  • Organic Manures: Natural fertilisers like farmyard manure, compost, and vermicompost improve soil structure, water-holding capacity, and nutrient content.
  • Biofertilizers: Microbial inoculants, such as Rhizobium, Azotobacter, and Mycorrhiza, enhance nutrient availability by fixing atmospheric nitrogen or improving nutrient uptake.
• Recent Developments
  • Investment Policy: Six new urea plants set up since the new investment policy in 2012, adding a production capacity of 76.2 LMT per annum.
  • Revived Units: New gas-based Greenfield units set up for urea manufacturing at Ramgundam, Gorakhpur, Sindri, and Barauni.

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