Fertiliser imports are set to surge 76% in a single fiscal year to a record $18 billion. A Parliamentary Standing Committee report, tabled the same month, explains the mechanism in one line: 90% of urea's cost is natural gas, and India sources only a quarter of that gas domestically. This is the fertiliser side of a story an earlier piece on this blog already priced from the gas side.
Agriculture · Trade · Energy
India's Fertiliser Import Bill Hits $18 Billion, and Parliament's Own Committee Explains Why
Published · v1.0.0 · Standing Committee on Chemicals and Fertilisers report, 1 December 2025 (PRS Legislative Research summary) · Business Standard, January 2026
The number, and why it jumped
Not a one-off spike. A rains-driven demand surge on top of a structural import dependence.
India's fertiliser import bill is projected to hit a record $18 billion this fiscal year, a 76% jump from the year before, according to government and industry officials cited in January 2026 reporting. The proximate cause was weather, not policy: heavy rains prompted farmers to expand the area under cultivation, pushing up fertiliser consumption faster than domestic production could follow. The two products doing the most damage to the import bill are urea and DAP (di-ammonium phosphate), sourced mainly from Oman, Russia, China, Saudi Arabia and Morocco.
What Parliament's own committee says the real problem is
Not a bad year. A structural dependence the committee has now put a number on.
The Standing Committee on Chemicals and Fertilisers, chaired by Azad Kirti Jha, tabled a report on 1 December 2025 titled “Self-Sufficiency in Production of Fertilisers with a View to Curb Import of Fertilisers — Review of Constraints thereof.” Its central finding connects directly to a fuel an earlier piece already priced: 90% of the total cost of producing urea is natural gas, procured largely through long-term import agreements — and only 26% of that gas is sourced domestically. The committee recommended reworking India's gas procurement mechanism to secure constant supply at competitive prices, and expediting domestic gas extraction to cut both import dependence and production cost.
Exhibit 1
What the Standing Committee found
Standing Committee on Chemicals and Fertilisers, report tabled 1 December 2025.
| Finding | Figure, % |
|---|---|
| Share of urea's production cost that is natural gas | 90 |
| Share of that gas sourced domestically | 26 |
| India's import dependence for phosphate requirements | 95 |
| India's import dependence for potash requirements | 100 |
PRS Legislative Research, Report Summary: “Self-Sufficiency in Production of Fertilisers with a View to Curb Import of Fertilisers — Review of Constraints thereof,” summarising the Standing Committee on Chemicals and Fertilisers report of 1 December 2025.
Potash is the starkest line in that table: India imports 100% of its potash, and the reason is more precisely a mining-capacity gap than a pure geological one. India has no commercially exploited potash mine, but it is not reserve-free: the Geological Survey of India has estimated roughly 20,000 million tonnes of probable and possible potash reserves in the Nagaur-Ganganagar basin spanning parts of Rajasthan (Hanumangarh, Bikaner and neighbouring districts). Those deposits remain undeveloped, so in practice the 100% import figure holds today regardless of what sits underground. Concretely, that means importing roughly 40 lakh tonnes (about 4 million tonnes) of Muriate of Potash (MOP) a year, sourced mainly from Canada (through the Canpotex marketing consortium), Belarus, Israel, Jordan and Russia — a supplier list with real geopolitical concentration risk, given Belarus and Russia's own sanctions exposure and Canpotex's effective control of a large share of the world's seaborne potash trade. Phosphate at 95% import-dependence is closer to a solvable problem — the committee's recommendation is long-term supply agreements and joint ventures with raw-material-rich countries, plus faster completion of projects already underway to expand domestic phosphatic and potassic (P&K) capacity. The aging-plant finding adds a capacity-replacement problem on top of the raw-material one: 27 of 33 operational urea plants are more than a quarter-century old, and the committee flagged that the sector needs a technology transition within five years, recommending a dedicated task force for upgrading, modernising and reviving them.
The gas link, priced
This is the fertiliser-side half of an argument an earlier piece already made from the gas side.
What the committee wants done about it
Six recommendations, none of them quick.
- A task force to promote domestic urea production under the New Investment Policy, alongside fiscal and tax incentives for new phosphatic and potassic capacity.
- Indigenous process technology — the committee flagged India's current dependence on foreign companies for licensing the technology used to build and run fertiliser plants as a strategic gap in its own right, separate from the raw-material dependence.
- A modified gas procurement mechanism, to secure constant supply at competitive prices and reduce the subsidy's exposure to gas-price volatility — the same 90%-of-cost figure above is the reason this recommendation exists.
- Long-term agreements and joint ventures with countries that hold the phosphate and potash reserves India lacks, plus faster completion of already-initiated P&K expansion projects.
- Nano-fertiliser promotion, including a proposed Production Linked Incentive scheme specifically for drones used to spray nano-fertilisers — framed by the committee as a lower-raw-material-intensity substitute for conventional fertiliser at scale.
- Anti-black-marketing measures — a network of quality-testing labs and a grievance-redressal mechanism, aimed at the diversion of subsidised fertiliser, which the committee treats as a fiscal leakage problem as much as a farmer-protection one.
Related — gas, since urea's cost is 90% gas. Thermal Parity Is Dead · LPG's Missing Number · City Gas Just Became India's Largest Gas Consumer · Europe Bought a Record Amount of LNG · The CBG Incentive Stack.
Sources. Record fertiliser import bill ($18 billion, +76% YoY) and import sourcing (Oman, Russia, China, Saudi Arabia, Morocco) — Business Standard, “Fertiliser imports set for record $18 billion this fiscal year: Officials,” January 2026. Standing Committee on Chemicals and Fertilisers findings and recommendations — PRS Legislative Research, Report Summary on the Committee's report of 1 December 2025 (Chair: Azad Kirti Jha), prsindia.org. MOP import volume (~40 lakh tonnes/year), supplier countries (Canada via Canpotex, Belarus, Israel, Jordan, Russia) and India's undeveloped Rajasthan potash reserves (GSI estimate, ~20,000 million tonnes probable/possible) — compiled from Volza trade-data summaries, PIB coverage of the Canpotex MOU, and Takshashila Institution's fertiliser-geopolitics brief; this article could not independently verify the 40-lakh-tonne figure against a single primary customs or Department of Fertilizers dataset, so it is reported as a widely cited industry estimate rather than an official statistic. India's domestic gas pricing and its crude-oil linkage — this blog's own thermal parity article, sourced to PPAC's live gas price notifications. This article's fertiliser-import figures were not independently cross-checked against a PIB or ministry press release; where a claim rests on a single news source rather than a primary government document, that is noted in the text.
About this article: Researched, written and edited by Umashankar Triplicane Dwarakanathan, with AI research assistance; every figure is meant to trace to the primary source cited. See the Editorial Policy for how sourcing, AI use and corrections work.
