Answer

India, the world’s second-largest fertiliser consumer, depends heavily on imports 100% of Muriate of Potash (MOP), 60% of Diammonium Phosphate (DAP), and 20% of urea in 2023 mostly from the Middle East. The Russia-Ukraine war revealed critical supply weaknesses, and escalating Iran-Israel tensions pose new risks, underscoring the urgent need for policy reforms and supply diversification.

Gaps in India’s Fertiliser Policy and Management

• Lack of Strategic Reserves: India maintains no long-term fertiliser buffer like oil or grain stocks.
  Eg: Firms like Indian Farmers Fertiliser Cooperative Limited (IFFCO) and National Fertilizers Limited (NFL) only store 30–45 days of supply, insufficient during Kharif-Rabi peaks.
• Overdependence on Imports: Heavily reliant on the Middle East and Russia for raw materials and finished fertilisers.
  Eg: In 2023, 20–25% of India’s total fertiliser imports originated from Gulf countries, predominantly via the critical Strait of Hormuz.
• Reactive Policy Making: Policies respond post-crisis without anticipatory planning or pre-crisis preparedness.
  Eg: After the 2022 Russia-Ukraine conflict, India failed to build DAP and MOP reserves, despite price volatility.
• Cost-Focused Procurement: Government prioritises cheap and bulk deals over secure, diversified, and resilient sourcing.
  Eg: Long-term deals with Qatar or Saudi Arabia favour pricing, not supply chain flexibility during crises.
• Inefficient Infrastructure: Ageing urea plants and poor logistics delay fertiliser distribution to interior rural regions.
  Eg: Port-to-farm lag and bottlenecks during sowing seasons reduce timely access, particularly in eastern states.
• High Fiscal Burden: Fertiliser subsidy absorbs shocks, but divert funds from essential agri-infrature and innovation.
  Eg: Subsidy bill projected to cross ₹2.5 lakh crore in FY24, limiting capital spending on irrigation or R&D.

While these gaps have persisted, urgent reforms are required to shield Indian agriculture from external shocks.

Reforms Needed to Strengthen Fertiliser Security

• Build Strategic Reserves: Establish 3–6 month fertiliser stockpiles to absorb supply chain shocks.
  Eg: Create DAP-MOP reserves akin to the buffer stock model of FCI for food security.
• Diversify Import Sources: Reduce dependence on the Gulf by expanding ties with phosphate-rich nations.
  Eg: Invest in Morocco (70% global phosphate reserves), Canada (potash), and Jordan for joint ventures.
• Modernise Domestic Plants: Revamp ageing factories using energy-efficient tech and digital monitoring.
  Eg: The Gorakhpur Fertiliser Plant, revived by HURL in 2022, uses state-of-the-art ammonia production technology, improving energy efficiency and production capacity.
• Promote Alternatives: Encourage biofertilizers, nano urea, and organic inputs for balanced and sustainable use.
  Eg: The sales of IFFCO Nano Urea Plus (Liquid) rose by 31% and Nano DAP (Liquid) by 118% in FY 2024–25 over FY 2023–24, reflecting increasing farmer preference for nano fertilisers.
• Flexible Contracting & Logistics: Secure long-term supply through flexible shipping routes avoiding conflict zones.
  Eg: Shift trade away from the Strait of Hormuz during crises; develop alternative routes via Chabahar Port.
• Improve Subsidy Delivery: Rationalise and digitise subsidies for faster transfer and better targeting.
  Eg: Direct Benefit Transfer (DBT) in fertilisers now covers 100% retailers, improving fund utilisation and accountability.

India’s journey towards Atma Nirbhar Bharat holds the promise to revolutionize its fertiliser sector igniting domestic production, cutting import reliance, and fortifying supply chains. Through bold reforms and cutting-edge innovation, India can craft a self-reliant future, safeguarding its food security and standing resilient amid global uncertainties.

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