Fertiliser imports fall on higher local output
India's 2023-24 fertilizer imports dropped by nearly 10% as local production increased, aiming for self-sufficiency in urea. Subsidy costs remain high due to elevated raw material prices.
India’s imports of fertilisers in 2023-24 fell nearly 10% due to a boost in local production as the country, which entirely depends on overseas markets for many types of crop nutrients, looks to achieve self-sufficiency in urea, official data show.
The drop in imports was mainly on account of falling inbound shipments of urea by the world’s top importer of the fertilizer for three years in a row. The country also saw lower imports of DAP, another crop nutrient.
Lower shipments could potentially result in savings in fertilizer subsidy if global prices of other crop nutrients and raw materials, such as natural gas, remain stable or see further moderation, an official said, declining to be named.
Food security of the world’s most populous nation is closely linked to availability of fertilisers, whose prices hit a multi-year peak in 2022 due to the Ukraine conflict and knock-on effects of the pandemic on supply chains.
Urea imports dropped 7% to 7.04 million tonnes due to a 20% jump in domestic output to 31.4 million tonnes in 2023-24, according to the data. The Union government has set 2025-26 as the deadline by which the country will end all urea imports. India mainly imports urea from Oman, Qatar, Saudi Arabia and the United Arab Emirates.
Lower imports of urea also came on the back of higher local production of nano urea, a liquid form of the farm chemical, as well as a move towards eco-friendly alternatives by farmers. The Indian Farmers Fertiliser Cooperative (IFFCO) has sold about 3.3 million tonnes of locally produced nano urea worth about ₹7 crore between August 2021 to February 2024
The government subsidizes a range of fertilizers to farmers through manufacturers and importers, who sell crop nutrients at a discount to millions of cultivators through internet-enabled outlets. These firms are then reimbursed by the government. Urea accounts for about 70% of the overall fertiliser subsidy bill.
Lower imports in 2023-24, however, did not reduce the overall fertilizer subsidy, which touched nearly ₹2 lakh crore, higher than a revised budgetary allocation of ₹1.89 lakh crore. It was mainly because of elevated prices of intermediate goods and raw materials used in the production of fertilisers.
India aims to end urea imports when five new plants start production. Plants at Gorakhpur in Uttar Pradesh, Ramagundam in Telangana and at Talcher, Barauni and Sindri are slated to together produce 6.5 million tonnes of urea every year.
Imports of DAP, another key fertilizer, stood at 5.51 million tonne, down from 7.08 million tonne, a drop of 22.2%. The lower imports of urea and DAP were offset by higher inbound shipments of muriate of potash, which rose to 2.1 million tonne from 1.3 million tonne, up 51%.
Overall fertilizer consumption in the country rose 2.6% to 60 million tonne in 2023-24, according to data from the fertilizer ministry.
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