India imported 25.08 lakh tonnes of urea and 7.11 lakh tonnes of DAP in the first quarter of fiscal 2026-27. The government is signing long-term supply deals with countries like Saudi Arabia and Russia to secure supplies and reduce reliance on any single market.
Detailed Coverage
India continues to rely on significant fertilizer imports to meet the high demands of its agricultural sector. During the first quarter of the current fiscal year (April to June 2026), the country imported 25.08 lakh tonnes of urea and 7.11 lakh tonnes of di-ammonium phosphate (DAP). These imports serve to fill the gap between the nation's domestic production capacity and the actual requirement of the farming community.
Domestic Production and Supply Dynamics
While domestic fertilizer production remains robust, it does not fully cover the total demand. In the June quarter, total domestic production across all fertilizers reached 115.72 lakh tonnes. Within this, urea production contributed 71.55 lakh tonnes, and DAP production stood at 9.84 lakh tonnes. For context, in the previous full fiscal year of 2025-26, India produced 517.74 lakh tonnes of fertilizers, while importing 103.50 lakh tonnes of urea and 61.94 lakh tonnes of DAP to maintain stock levels.
Strategic Shift in Import Sourcing
To protect the domestic supply chain from global disruptions, the government is moving away from a single-country dependency. The Department of Fertilizers, working with Indian Missions, has identified alternative suppliers in regions such as Belgium, Egypt, Germany, Morocco, and the USA. This strategy is particularly significant for specialty fertilizers, as some traditional suppliers like China have reportedly restricted exports.
Long-Term Agreements and Security
Indian fertilizer companies have entered into several long-term commercial agreements to ensure price and supply stability. Notable arrangements include a deal with Saudi Arabian firms to secure approximately 31 lakh tonnes of DAP annually. Additionally, Indian entities have finalized agreements with Russian suppliers for roughly 26.50 lakh tonnes of DAP and NPK fertilizers. For Muriate of Potash (MOP), agreements are in place for 4.80 lakh tonnes from Russia, Germany, and Turkmenistan.
These long-term contracts are designed to hedge against sudden shortages and price volatility in the global commodity market. For investors, the stability of these supply lines is critical, as any disruption in raw material availability or a spike in international prices can put pressure on the margins of domestic fertilizer manufacturers who operate under government-regulated pricing structures.