India’s Agricultural Sector: Rising Fertiliser Costs and Weak Monsoon Threaten Food Security

Rising fertiliser prices and forecasts of a weak monsoon have intensified concerns over India’s agricultural productivity and food security ahead of the Kharif 2026 season.

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Key Concerns Regarding India’s Agricultural Sector

• Fertiliser Supply and Price Shock: India’s fertiliser imports and domestic production have been disrupted due to tensions in West Asia and closure of the Strait of Hormuz.
  • Urea import prices nearly doubled, while DAP prices rose sharply, increasing subsidy burdens on the government.
  • Domestic urea production declined significantly in March 2026, affecting Kharif preparedness.
• Weakening Monsoon Risks: The India Meteorological Department (IMD) forecast below-normal southwest monsoon rainfall at 92% of Long Period Average (LPA).
  • Expected El Niño conditions may reduce rainfall during the crucial crop growth period.
  • Rain-fed crops such as paddy, pulses, cotton and oilseeds remain highly vulnerable to rainfall variability.
• Pressure on Food Security and Inflation: Rising fertiliser costs and weak agricultural output may increase food inflation and affect rural incomes.
  • Lower crop yields could adversely impact India’s progress towards Sustainable Development Goal-2 (Zero Hunger).
  • Supply shortages may lead farmers to reduce fertilizer use, affecting productivity and foodgrain availability.
• Rising Fiscal Burden: The fertiliser subsidy mechanism transfers global price shocks onto government finances.
  • The fertiliser subsidy bill already exceeded revised estimates before the Gulf crisis intensified.
  • Continued import dependence may strain fiscal stability if geopolitical tensions persist.

Factors Causing the Distress

• Dependence on Imported Fertilisers and LNG: India depends heavily on Gulf countries for LNG and fertiliser imports, especially urea and DAP.
  • Natural gas is the primary feedstock for urea production, making domestic output vulnerable to energy disruptions.
• Strait of Hormuz Disruption: The Strait of Hormuz is a critical global maritime chokepoint through which nearly one-third of global fertilizer trade passes.
  • Restricted movement increased transportation costs, delayed supplies and raised global fertiliser prices.
• Climate Variability and El Niño: Increasing frequency of El Niño events has intensified monsoon uncertainty.
  • Climate change has increased the frequency of extreme weather events, affecting sowing cycles and crop yields.
• Structural Dependence on Urea-intensive Agriculture: Indian agriculture remains highly dependent on chemical fertilisers and water-intensive crops.
  • Imbalanced fertilizer usage and monocropping patterns have increased ecological and economic vulnerabilities.

Way Forward

• Promote Sustainable and Balanced Agriculture: Encourage nano-urea, biofertilisers and organic farming to reduce excessive dependence on imported fertilisers.
  • Promote crop diversification towards less water-intensive and climate-resilient crops.
• Strengthen Domestic Capacity and Supply Chains: Expand domestic fertiliser production capacity and diversify import sources beyond the Gulf region.
• • Build strategic reserves for critical agricultural inputs and improve logistics resilience.
• Improve Climate Resilience: Expand irrigation infrastructure, micro-irrigation and climate-smart agricultural practices.
• • Strengthen weather forecasting, crop insurance and farmer advisory systems for risk mitigation.

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Conclusion

India must combine climate-resilient agriculture, fertiliser self-reliance and sustainable farming reforms to safeguard food security and rural livelihoods from future shocks.

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