Winning Bizness Desk

Mumbai. India’s fertiliser production dropped sharply in March 2026 as the ongoing US-Israel and Iran conflict disrupted energy supplies and global shipping routes. Official data shows output fell by around 24.6% compared to the same month last year, mainly due to shortages of natural gas — the key raw material used to produce urea. The closure and disruption of the Strait of Hormuz, a critical global trade route, has choked supplies of LNG and fertiliser inputs, hitting domestic production at a crucial time for agriculture.

Dependence on gulf supplies exposes India heavily

India depends heavily on imports for both fuel and fertiliser inputs, making it vulnerable to global disruptions. A large share of LNG and fertiliser raw materials comes from Gulf countries, most of which transit through the Strait of Hormuz. Nearly one-third of global fertiliser trade passes through this route, making any disruption a global concern.

• Around 60% of LNG needs met through imports
• Nearly 40% of urea supply linked to Gulf region
• One-third of global fertiliser trade uses Hormuz route
• Over 45% of India’s population depends on farming

Import dependence deepens structural risks further

India is among the world’s largest fertiliser consumers, yet remains dependent on imports for a significant portion of its needs. While the country is close to self-reliance in urea production, it still relies on imported natural gas. In other fertilisers like DAP and potash, import dependence is as high as 80–90%, making the sector highly sensitive to global shocks.

Key reasons behind sharp fall in production

The fall in fertiliser output is driven by multiple factors linked to the war and supply disruptions. Natural gas shortages have forced several urea plants to cut production, while logistics and cost pressures have worsened the situation.

• Shortage of natural gas, key feedstock for
• Disruption in Hormuz shipping route
• Surge in global energy prices
• Higher insurance and transport costs in war zone

Farmers and economy face ripple effects ahead

The decline in fertiliser production is expected to impact agriculture, food supply and the broader economy. Experts warn that reduced fertiliser availability could lower crop yields and push up food prices in the coming months. Globally, fertiliser prices have already surged due to supply disruptions.

• Crop yields may fall by 10–15%
• Risk of food inflation and supply shortages
• Rising input costs for farmers
• Higher subsidy burden on government

Government and industry weigh short and long term options

India is now looking at both immediate and long-term measures to tackle the crisis. In the short term, the focus is on securing alternative supply lines and using buffer stocks. Over the long run, the government is pushing for structural changes to reduce import dependence.

• Diversifying imports to Russia, Africa and other regions
• Releasing buffer stock to stabilise supply
• Promoting nano urea with lower gas usage
• Expanding coal gasification-based fertiliser plants
• Investing in green ammonia and overseas assets

As the conflict continues, analysts warn that prolonged energy disruption could widen India’s trade deficit and increase inflation, underlining the deep link between geopolitics and food security.