04 Aug Iran War and India’s Fertiliser Security: A Wake-Up Call for Agricultural Resilience
Subject Mapping (UPSC Syllabus)
| Prelims | Mains GS Papers |
|---|---|
| Agriculture, Fertilisers, Energy Security, International Relations, Current Affairs | GS Paper III: Agriculture, Food Security, Energy Security, External Sector |
| West Asia, Strait of Hormuz, LNG Imports | GS Paper II: India’s Foreign Relations, West Asia |
Why is this in News?
The ongoing Iran-West Asia conflict and disruptions in the Strait of Hormuz have increased uncertainty in global energy and fertiliser markets. Since India depends heavily on imported LNG, ammonia, phosphoric acid, sulphur and potash, any supply disruption directly affects fertiliser production and agricultural costs.
Although the government has managed to maintain adequate urea supplies through import diversification, concerns remain over the availability and affordability of DAP and complex fertilisers ahead of the upcoming cropping seasons.
Therefore, the issue has become significant for food security, inflation management and agricultural sustainability.
Relevant Images
Background
India is the second-largest consumer of fertilisers in the world. However, domestic production is insufficient to meet total demand.
As a result, India imports large quantities of:
- LNG (for urea production)
- Phosphoric acid
- Rock phosphate
- Potash
- Sulphur
- Ammonia
Meanwhile, geopolitical tensions in West Asia have increased shipping costs, insurance premiums and input prices, creating pressure on India’s fertiliser subsidy bill.
Why Does the Iran Conflict Affect India’s Fertiliser Supply?
Fertiliser production depends heavily on imported raw materials and energy.
Key Linkages
- Natural Gas (LNG) → Feedstock for Urea
- Ammonia → Raw material for nitrogen fertilisers
- Sulphur → Used to manufacture sulphuric acid
- Sulphuric Acid + Phosphoric Acid → Essential for DAP and NPK fertilisers
Consequently, disruptions in energy markets quickly translate into higher fertiliser costs.
Key Highlights
1. Urea Supply Remains Stable
The government diversified LNG imports from countries such as:
- United States
- Oman
- Nigeria
- Angola
- Norway
- Trinidad & Tobago
Consequently, domestic urea production recovered despite temporary disruptions.
2. DAP Remains the Biggest Concern
No major DAP import contracts have reportedly been signed after global prices increased sharply.
Moreover, phosphoric acid prices have risen significantly, increasing production costs.
3. Sulphur Shortage
Sulphur is essential for manufacturing:
- DAP
- SSP (Single Super Phosphate)
- Complex fertilisers
Therefore, higher sulphur prices directly affect fertiliser availability.
4. Rising Input Costs
According to the editorial:
- Phosphoric acid prices increased from around US$1,055 per tonne (2025) to nearly US$1,700 per tonne.
- Sulphur prices also surged following the Iran conflict.
As a result, fertiliser manufacturers face higher production costs.
5. Pressure on Fertiliser Subsidies
India keeps fertiliser prices affordable through substantial government subsidies.
However, rising import prices increase the subsidy burden on the Union Budget.
Relevant Data
India’s Fertiliser Dependence
- India imports almost 100% of its potash requirement.
- More than 85% of phosphatic raw materials are imported.
- LNG remains the primary feedstock for urea production.
Fertiliser Subsidy
- Fertiliser subsidy continues to be one of the largest agricultural support expenditures in the Union Budget, often exceeding ₹1 lakh crore annually, depending on global prices.
Agriculture
- Nearly 50% of India’s workforce remains dependent on agriculture for livelihood.
Challenges Facing India’s Fertiliser Sector
1. Import Dependence
Heavy reliance on imported raw materials exposes India to geopolitical risks.
2. Geopolitical Instability
Conflicts in West Asia can disrupt shipping routes and increase freight costs.
3. Price Volatility
Global energy prices strongly influence fertiliser costs.
4. Limited Domestic Raw Material Availability
India has limited reserves of potash and high-grade phosphate.
5. Fiscal Burden
Higher subsidies strain public finances.
6. Climate Risks
Erratic monsoons create uncertainty in fertiliser demand and inventory planning.
Government Initiatives
Nutrient Based Subsidy (NBS) Scheme
Provides subsidies for phosphatic and potassic fertilisers based on nutrient content.
New Urea Policy
Promotes energy-efficient domestic urea production.
PM-PRANAM Scheme
Encourages states to reduce excessive chemical fertiliser use and promote balanced nutrient management.
Nano Urea
Developed by IFFCO, Nano Urea aims to improve nutrient-use efficiency while reducing conventional urea consumption.
Neem-Coated Urea
Improves nitrogen-use efficiency and reduces diversion for industrial use.
Significance of this Issue
Food Security
Stable fertiliser supplies are essential for sustaining agricultural productivity.
Farmer Welfare
Affordable fertilisers reduce cultivation costs and support farm incomes.
Inflation Control
Higher fertiliser prices can increase food prices and overall inflation.
Energy Security
Diversified LNG sourcing strengthens resilience against global disruptions.
Strategic Autonomy
Reducing import dependence enhances India’s long-term economic security.
Way Forward
Diversify Import Sources
India should expand long-term contracts with suppliers across multiple regions.
Promote Domestic Fertiliser Production
Greater investment in domestic ammonia and phosphatic fertiliser capacity is needed.
Build Strategic Fertiliser Reserves
Maintaining emergency stocks can cushion short-term disruptions.
Encourage Balanced Fertiliser Use
Greater adoption of Nano Urea, bio-fertilisers and organic farming can reduce import dependence.
Strengthen Research**
Investment in alternative nutrient technologies and precision agriculture should be increased.
Improve Supply Chain Resilience
Integrated logistics and storage infrastructure can minimise disruptions during global crises.
UPSC Prelims Practice Questions
Q1. With reference to the Nutrient Based Subsidy (NBS) Scheme, consider the following statements:
- It provides subsidies based on the nutrient content of fertilisers.
- Urea is covered under the NBS Scheme.
- The scheme aims to promote balanced fertiliser use.
Which of the statements given above is/are correct?
(a) 1 and 3 only
(b) 2 only
(c) 1, 2 and 3
(d) 3 only
Answer: (a)
Explanation
- Statement 1: Correct. The NBS Scheme fixes subsidies according to the nutrient content (N, P, K and S) of phosphatic and potassic fertilisers.
- Statement 2: Incorrect. Urea is not covered under the NBS Scheme and continues to be regulated separately.
- Statement 3: Correct. The objective is to encourage balanced application of plant nutrients and improve nutrient-use efficiency.
Q2. Which of the following fertilisers primarily require phosphoric acid as a key raw material during manufacturing?
- Di-Ammonium Phosphate (DAP)
- NPK Complex Fertilisers
- Single Super Phosphate (SSP)
Select the correct answer using the code below:
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1, 2 and 3
(d) 1 only
Answer: (c)
Explanation
- DAP is manufactured using phosphoric acid and ammonia.
- NPK complex fertilisers require phosphoric acid along with other nutrient sources.
- SSP is also produced using phosphate rock treated with sulphuric acid, making phosphatic raw materials essential. Hence, all three are linked to phosphoric inputs.
UPSC Mains Practice Question (GS Paper III)
“India’s fertiliser security is increasingly influenced by geopolitical developments in West Asia. Discuss the challenges arising from import dependence and suggest measures to build a resilient fertiliser supply chain.” (250 words)
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