India manages urea supply amid West Asia war but DAP shortfall persists

Fertilisers are the single most critical purchased input in Indian agriculture, underpinning the yield gains of the Green Revolution and sustaining food production for over a billion people. India's fertiliser economy rests on three primary nutrients — nitrogen (N), phosphorus (P), and potassium (K) — delivered through distinct products: urea (N), di-ammonium phosphate (DAP) (P), muriate of potash (MOP) (K), and complex fertilisers (NPK blends). The government has historically maintained a dual subsidy architecture: urea is under a statutory price control regime with the Centre bearing the full gap between production cost and the maximum retail price, while DAP and complex fertilisers receive a flat per-bag subsidy under the Nutrient-Based Subsidy (NBS) scheme introduced in 2010, which does not cap retail prices.

India is the world's second-largest consumer of fertilisers but is structurally import-dependent for key inputs. Urea production depends on liquefied natural gas (LNG) as the primary feedstock for ammonia synthesis; India imports a significant share of its LNG requirements. For phosphatic fertilisers, India imports virtually all of its phosphoric acid, sulphur, and rock phosphate requirements, as domestic reserves are limited. This dual dependency — on energy for urea and on mineral intermediates for DAP — makes India's fertiliser supply chain acutely sensitive to global commodity shocks and geopolitical disruptions.