Amid Iran war squeeze, unravelling the real cost of India's fertiliser imports

📌 Summary:

• In 2025-26, India imported 28.2 million tonnes (mt) of finished fertilisers worth over $14.5 billion (urea $5.2bn, DAP $4.9bn, MOP $1.3bn) - up sharply from $8.2bn the previous year
• This finished-fertiliser figure understates the true foreign exchange outflow, because domestic fertiliser production itself depends heavily on imported inputs
• Hidden import-cost chain: (1) urea needs natural gas - the fertiliser sector used about 47% of regasified LNG, worth roughly $6.3bn; (2) DAP and complex fertilisers need imported phosphoric acid, rock phosphate, ammonia and sulphur, as India has almost no mineable rock phosphate, potash or sulphur reserves
• Adding inputs (phosphoric acid $2.7bn, rock phosphate $1.9bn, ammonia $1.1bn, sulphur $776mn), India's all-inclusive fertiliser import bill was about $27.2 billion in 2025-26 - second only to the record $33.4bn of 2022-23
• War impact: the US-Israel-Iran conflict and closure of the Strait of Hormuz have driven up global fertiliser prices - landed urea prices jumped to $935-959/tonne from $410-420 a year earlier; rupee depreciation (95.7 vs 85.2 to the dollar) further raises the domestic cost
• If trends hold without a US-Iran breakthrough, the 2026-27 bill could match or cross the $33.4bn record; orders by UP, MP and Maharashtra banning subsidised-fertiliser firms from selling non-subsidised products have added to industry disquiet

🎯 UPSC Relevance: GS3 (Economy / Agriculture) - India's fertiliser import dependence and subsidy burden, vulnerability to geopolitical shocks, the link between energy prices and food security, and the case for diversifying import sources and boosting domestic nutrient capacity.

📝 Prelims Facts:

• Major imported fertilisers: urea, DAP (di-ammonium phosphate) and MOP (muriate of potash)
• Natural gas (LNG) is the primary feedstock for urea production
• India imports more than half its natural gas needs and has negligible rock phosphate, potash and elemental sulphur reserves
• India's record fertiliser import bill was $33.4 billion in 2022-23, the year after the Russia-Ukraine war began

🔑 Key Term: Strait of Hormuz - a narrow waterway linking the Persian Gulf to the Gulf of Oman through which roughly a fifth of global oil and key fertiliser inputs are shipped; its disruption raises landed import costs worldwide.