SML Limited executive Komal Shah Bhukhanwala warned that geopolitical tensions are threatening India’s fertilizer supply chain. The company, which earns over 55% of its revenue from exports, is advocating for domestic innovation in nutrient-efficient technologies to reduce dependence on imported raw materials.
India’s agricultural sector faces mounting pressure from global geopolitical instability, particularly as conflicts in regions like West Asia create volatility in energy and shipping markets. Komal Shah Bhukhanwala, executive director at SML Limited, recently highlighted how this reliance on imported fertilizer raw materials leaves the domestic agricultural input industry vulnerable to price shocks and supply chain disruptions.
Moving Toward Domestic Innovation
To mitigate these risks, the company is calling for a stronger focus on high-nutrient-use-efficiency (NUE) fertilizers. These advanced technologies are designed to improve nutrient delivery while potentially cutting the requirement for bulk fertilizers by 25% to 50%. The strategy aims to lower the nation's import burden and improve resource management. From a policy perspective, the industry is seeking support through faster regulatory approvals, a uniform Goods and Services Tax (GST) structure across all nutrient grades, and increased incentives for domestic research and development.
Operational Resilience and Global Reach
SML Limited, which was established in 1960 and operates across more than 80 countries, has faced logistical challenges and rising freight costs due to the ongoing global instability. Despite these pressures, the company’s business model remains focused on maintaining supply continuity. By balancing domestic sourcing with international partnerships, SML has managed to keep operations stable even when bulk fertilizer availability is threatened. The company, which is a major producer of water-dispersible granule (WDG) formulations, currently holds over 950 patents, underscoring its focus on proprietary chemical entities as a way to differentiate itself from traditional commodity players.
Financial Context and Market Strategy
With an annual group turnover of approximately ₹2,200 crore, SML Limited maintains a significant footprint in the global agrochemical market. Exports currently account for more than 55% of the company’s total revenue, providing a critical pillar of stability as it navigates domestic market fluctuations. The industry is witnessing a clear shift toward sustainable, innovation-led agriculture, moving away from conventional nitrogen-based and phosphatic fertilizers. For investors, the company's future performance will likely depend on its ability to scale these advanced formulations in both domestic and international markets while managing the inherent volatility in raw material pricing.
The key monitorables for stakeholders include the company's ability to maintain its margin profile amid rising logistics costs and the speed at which it can deploy its new patent-backed technologies to capture market share from traditional fertilizer manufacturers. Investors will also watch for any changes in government policy regarding GST uniformity or increased subsidies for NUE-based products, which could act as a catalyst for domestic adoption.