By R. Suryamurthy
When China quietly shut off the tap on fertiliser exports to India earlier this year, it didn’t just disrupt supply lines or trigger a price surge. It exposed a far more troubling truth: India’s agricultural security is only as strong as the weakest link in its import-dependent input chain. That weak link, in this case, was a politically weaponised reliance on a single country—one whose strategic interests increasingly diverge from our own.
Since April 2025, China has withheld inspection clearances for fertiliser shipments to India, effectively blocking exports of both di-ammonium phosphate (DAP) and specialityfertilisers. These fertilisers are crucial during the kharif season, when Indian farmers sow key food crops like rice, maize, cotton, and pulses. Yet while shipments to India were blocked, exports to other countries went ahead unimpeded. It was a targeted move, wrapped in silence, but loaded with geopolitical implications.
India was not merely caught off guard. It was caught exposed—despite years of warnings, despite policy claims of self-reliance, and despite knowing fully well that China was no longer just a trade partner, but a strategic rival.
The fertiliser crunch now unfolding across India didn’t arrive without notice. China began restricting fertiliser exports in 2023, and the warning lights flashed brighter through 2024. Yet Indian importers and policymakers alike chose to front-load purchases from Chinese suppliers instead of diversifying aggressively. In FY24, DAP imports from China peaked at 2.29 million tonnes. By FY25, that number had collapsed to just 0.84 million tonnes—with zero shipments recorded since early 2025.
Meanwhile, global DAP prices have surged 26%, rising from $633 per tonne in January to $800 in July. The result: pressure on India’s fertiliser subsidy bill, strain on farm economics, and growing anxiety among small and marginal farmers already reeling from inflation in other input costs.
This wasn’t just a case of poor forecasting. It was a failure of strategic foresight. India has seen China leverage trade dependencies before—whether in active pharmaceutical ingredients (APIs), rare earths, or telecom components. Yet somehow, fertilisers remained out of the policy spotlight, as if their uninterrupted flow could be taken for granted.
DAP is India’s second-most consumed fertiliser after urea, used widely for early root development across major food crops. Specialityfertilisers—though smaller in volume—are critical for high-value horticulture, floriculture, and export-oriented produce. India consumes over 60 million tonnes of fertilisers annually, with specialityfertiliser demand ranging between 1.2–1.5 million tonnes per year.
The domestic capacity to meet these demands is limited. India imports over half of its DAP requirement and nearly a third of specialityfertilisers. Of these, 70–80% come from China—particularly advanced formulations like water-soluble blends, chelated micronutrients, and customised NPK variants.
This overdependence on one source has now become a textbook example of what happens when critical sectors are left geopolitically exposed. China’s silent embargo during a peak cropping season weaponised India’s structural dependency—and made clear just how little redundancy exists in our agri-input supply chain.
In July, India signed a five-year agreement with Saudi Arabia for the annual supply of 3.1 million tonnes of DAP—roughly 30% of its total domestic requirement. The deal, signed with Ma’aden by Indian Potash Ltd, KRIBHCO, and Coromandel International, is welcome and necessary. But its timing underscores how reactive India’s approach remains.
Why did it take a near-total Chinese shutdown to trigger a serious alternative sourcing agreement? Why wasn’t such diversification embedded into India’s fertiliser strategy earlier, when the signs of growing Chinese export restrictions were already evident?
The answer, unfortunately, lies in a broader pattern of crisis-driven policymaking. India’s fertiliser policy has been too focused on short-term affordability and subsidy administration, with little long-term emphasis on resilience, innovation, or strategic autonomy.
At the heart of the issue is a fertiliser ecosystem weighed down by legacy regulations and underwhelming reform. The Fertiliser Control Order (FCO), which governs everything from licensing to quality standards, remains cumbersome and outdated. Subsidy flows are opaque, inefficiently targeted, and skewed toward a narrow band of conventional fertilisers—often at the expense of precision inputs that could reduce long-term costs and improve soil health.
India has not invested adequately in building domestic manufacturing capacity for specialityfertilisers, nor has it prioritised backward integration into key raw materials like phosphoric acid and ammonia. Public-private R&D partnerships remain weak, and private sector interest is stifled by policy unpredictability.
The result is an ecosystem that is structurally incapable of absorbing global supply shocks or pivoting quickly to new technologies. And now, with DAP prices climbing and speciality inputs scarce, India is struggling to find its footing during one of the most critical agricultural windows of the year.
As usual, it is farmers—especially smallholders—who bear the brunt. In states like Maharashtra, Punjab, Karnataka, and Andhra Pradesh, reports of delayed or reduced fertiliser availability are growing. Some farmers are shifting to suboptimal fertiliser alternatives or reducing application rates. Others are paying inflated prices due to speculative hoarding and supply bottlenecks.
The impact isn’t just economic. Reduced application of DAP or delayed access to speciality nutrients like zinc, boron, or magnesium could directly hit yields and crop quality. For farmers growing high-value crops like grapes, onions, pomegranates, and chillies, this can mean lost income, broken export contracts, and long-term reputational damage.
More broadly, inconsistent access to critical inputs risks undermining the ongoing transition toward precision farming—a pillar of India’s sustainable agriculture strategy.
The current disruption must serve as more than a short-term alarm. It must become the inflexion point for a complete rethinking of India’s fertiliser security framework.
India must aggressively broaden its fertiliser supplier base—beyond Saudi Arabia, Morocco, Jordan, and Israel—to reduce vulnerability to single-source disruptions. Even if this comes at a marginally higher cost, the resilience benefits will outweigh short-term price gains.
The production of DAP and specialityfertilisers has to be expanded with a focus on backward integration for critical raw materials. Encourage joint ventures with global technology providers to localise production of advanced formulations.
There is need for streamlining regulatory approval for new fertiliser types. Subsidy mechanisms have to be revised to incentivise efficient nutrient use, rather than volume-based distribution. Support to small and marginal farmers in adopting precision products through targeted schemes is imperative.
Further, there is need for establishment of buffer stocks of key fertilisers and build real-time supply-chain monitoring systems to anticipate disruptions. Fertiliser availability should be treated with the same seriousness as food grain reserves or energy security.
An important task is to create dedicated funding platforms and institutions for fertiliser innovation. Support the development of climate-smart fertilisers, bio-enhanced formulations, and customised nutrient solutions suited to Indian agro-climatic zones has to be ensured.
China’s fertiliser freeze is not a one-off event—it’s part of a wider pattern. From tech components to pharmaceutical precursors, Beijing has shown an increasing readiness to exploit its dominance in global supply chains to achieve geopolitical objectives. India, meanwhile, has failed to build credible buffers or alternatives in many of these sectors.
In the case of fertilisers, the implications are immediate and far-reaching. Input insecurity translates into crop stress, farmer distress, and fiscal stress. It weakens our export competitiveness. And it directly threatens the livelihoods of millions and the food security of the nation.
India’s fertiliser crunch is a self-inflicted vulnerability. It could have been anticipated, mitigated, and managed better. But it wasn’t. Now that the consequences are playing out on farms and in market prices, the only productive response is to learn—and act—with urgency.
This is not the time for incrementalism. The crisis should serve as a wake-up call to reset policy, restructure the sector, and reprioritise strategic autonomy in agricultural inputs. Because next time, it may not be fertilisers. It could be seeds, pesticides, or agri-machinery. And if India doesn’t fix the structural gaps now, it will be just as unprepared then. (IPA Service)
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