India’s fertilizer situation amid global crises

Source: The post India’s fertilizer situation amid global crises has been created, based on the article “What challenges does India face in fertilizer imports?” published in “The Hindu” on 29th October 2024

UPSC Syllabus Topic: GS Paper 3 -Agriculture -Issues related to direct and indirect farm subsidies.

Context: The article discusses India’s fertilizer situation amid global crises. It highlights India’s reliance on imports for urea, DAP, and MOP. Experts suggest increasing domestic production and adopting better farming practices. The government has allocated significant subsidies for fertilizers in the 2023-24.

For detailed information on Issue of fertilizer read Article 1, Article 2

What is India’s Current Fertilizer Scenario?

1. Dependency on Imports: According to the Parliamentary Standing Committee report (August 2023), around 20% of urea, 50-60% of DAP, and 100% of Muriate of Potassium (MOP) are imported. This dependence on imports makes India vulnerable to global supply disruptions.
2. Production vs. Consumption: In 2021-22, India produced 435.95 lakh metric tonnes (LMT) of chemical fertilizers but consumed 579.67 LMT, showing a significant shortfall.
3. Impact of Global Crises: The conflicts in Ukraine and Gaza may disrupt fertilizer imports due to possible increases in oil prices and limited supply from key regions. India imports fertilizers from countries such as China, Russia, Saudi Arabia, UAE, Oman, Iran, and Egypt. Political instability in these regions could impact India’s supply chain.

Why is Fertilizer Demand Rising in India?

1.  India is experiencing high demand for fertilizers due to the ongoing sowing season for winter (rabi) crops, especially in wheat-growing states.

2. Fertilizers like Diammonium Phosphate (DAP) and NPK (Nitrogen, Phosphorus, Potassium) are essential for crop growth.
3. However, states like Uttar Pradesh report only 10 days’ worth of fertilizer stocks, raising concerns about supply.

What Measures Has the Government Taken?

1. The government allocated ₹1.79 lakh crore in fertilizer subsidies for 2023-24. This includes ₹1,04,063.20 crore for indigenous urea and ₹25,500 crore for indigenous P&K fertilizers.

2. For imported fertilizers, subsidies include ₹31,000 crore for urea and ₹18,500 crore for P&K fertilizers to support affordability and supply.
3. The New Investment Policy of 2012 led to the establishment of six new urea plants, adding a production capacity of 76.2 LMT per year.
4. Revival efforts include four major urea units (Ramgundam, Gorakhpur, Sindri, and Barauni) now operating as gas-based greenfield facilities.
5. The government encourages investment in public, cooperative, and private sectors to strengthen fertilizer production and marketing.

Way forward:

India should increase its fertilizer production to reduce reliance on imports, as it currently imports 100% of MOP and over 50% of DAP. Additionally, adopting sustainable farming and using nano urea can decrease import reliance and ensure stable fertilizer supply for crops.

Question for practice:

Discuss the measures India can take to reduce its reliance on fertilizer imports amid global supply challenges and rising domestic demand.