- The West Asia conflict has disrupted LNG and fertiliser supply chains, threatening India’s urea production ahead of the Kharif season.
- India depends on West Asia for both LNG (to produce urea domestically) and direct urea imports (71%) sourced from the region.
What is Urea?
- Urea is a nitrogen-rich chemical compound with the formula CO(NH₂)₂, widely used as a fertilizer.
- It contains 46% nitrogen, making it the most concentrated and commonly used nitrogenous fertiliser.
- Urea is produced from ammonia and carbon dioxide via the Haber-Bosch & urea synthesis process.
- Natural gas (LNG) is the main input as it provides hydrogen for ammonia production.
- India has shifted from naphtha/fuel oil-based plants to gas-based plants for efficiency & lower emissions.
India’s Dual Dependence Problem
- LNG Imports: India imports over 50% of its LNG, exposing urea production to global supply shocks.
- Fertiliser Imports: Domestic production is insufficient, so India imports large quantities of urea, DAP, and potash.
- Over 60% of LNG imports pass through the Strait of Hormuz, making supply vulnerable to conflict.
Economic & Agricultural Impact of LNG and Urea Disruptions
- Urea Production: LNG supply disruptions lead to lower output from fertiliser plants, affecting domestic availability.
- Price Rise: Dependence on imports causes fertiliser shortages and higher prices, especially during the Kharif season.
- Higher Subsidy: Increased global prices raise the government’s fertiliser subsidy expenditure.
- Food Security: Limited fertiliser use may reduce crop yields, impacting farmer income and overall food security.
Government Response & Policy Measures
- Fertiliser sector has been included under the priority category via the Natural Gas (Supply Regulation) Order, 2026.
- Assured Supply: Ensured ≥70% of average natural gas supply to fertiliser units to sustain production.
- Buffer Stock: Increased fertiliser reserves to ~177 LMT, including urea (~59–61 LMT) & DAP (~25 LMT).
- Subsidy Support: Continued fertiliser subsidies to cushion farmers from rising global prices.
Initiatives in India’s Fertiliser Sector
- Neem-Coated Urea: Neem coating of urea to reduce diversion, improve efficiency, and soil health.
- Nutrient-Based Subsidy: NBS Scheme Subsidy offered based on nutrient content (N, P, K, S) to encourage balanced fertiliser use (excluding urea).
- New Urea Policy (2015): Focus on maximising domestic production, energy efficiency, and reducing import dependence.
- DBT in Fertilisers: Subsidy transferred to companies based on actual sales to farmers via Point-of-Sale devices, ensuring transparency.
- Nano Urea: Developed by IFFCO to reduce urea consumption and improve efficiency.
- Soil Health Card: Provides farmers with soil nutrient status & recommendations for balanced usage.
- One Nation One Fertiliser: PMBJP – Bharat Brand standardised branding (“Bharat Urea, Bharat DAP”) to ensure uniform pricing and availability.
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Context (TH)
Frequently Asked Questions
What is urea fertiliser?
Urea is a nitrogen-rich chemical compound (CO(NH₂)₂) widely used as a fertiliser.
Why is urea the most used fertiliser in India?
Urea contains 46% nitrogen, making it the most concentrated and commonly used nitrogenous fertiliser.
Why has India shifted to gas-based urea plants?
India shifted to gas-based plants for higher efficiency and lower emissions compared to naphtha-based plants.
Why is the Strait of Hormuz important for India’s LNG supply?
Over 60% of India’s LNG imports pass through the Strait of Hormuz, making it a critical chokepoint.
