Key Takeaways
May 1, 2026 · 2 min read · By Rishabh Bhardwaj
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AI-assisted, human-reviewed · Our editorial standards
India plans to import 64 lakh tonnes of urea and 19 lakh tonnes of other fertilisers as global prices rise amid the US-Israel-Iran conflict, which is disrupting supply chains and pushing up input costs across key producing regions.
Domestic urea production has recovered to 35.4 lakh tonnes following the supply disruptions, but that output is not enough to meet India's agricultural demand. The gap between domestic supply and consumption requirements is forcing the government to source large volumes from international markets, precisely when global prices are elevated.
The US-Israel-Iran conflict adds pressure to an already tight global fertiliser market. The Middle East and nearby regions are significant in the fertiliser supply chain, both as producers of natural gas (the main raw material for urea) and as transit corridors. Any disruption in those routes or to energy supplies drives up production and shipping costs worldwide.
India is one of the world's largest fertiliser importers, and urea is the most widely used nutrient in Indian farming. The government subsidises urea heavily to keep it affordable for farmers, which means higher import prices translate directly into a larger subsidy bill for the Centre rather than higher costs at the farm gate, at least in the near term.
A combined import target of 83 lakh tonnes across urea and other fertilisers signals a significant procurement effort. If global prices stay elevated through the kharif and rabi seasons, the fiscal pressure on the fertiliser subsidy budget could widen noticeably.
Farmers are largely shielded from spot price swings by the subsidy mechanism, but the government's import and procurement timing will be critical. Locking in volumes at current elevated prices versus waiting for potential price corrections is the central trade-off. Watch for any government announcements on procurement contracts, subsidy outlay revisions, or diplomatic sourcing arrangements as indicators of how India plans to manage this gap.
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