12 Mar 2019
India is one of the world’s major fertiliser markets. However, its domestic industry also encounters many limitations and is not able to meet domestic demand. Owing to a lack of decisive reforms and of domestic raw materials (hydrocarbons, phosphate rock, potash), India’s production is not advancing as rapidly as domestic demand. As a result, the country depends heavily on imports, including for urea, which was once a self-reliant sector. India also remains the largest import market for P2O5 (including fertilizers, phosphoric acid, and phosphate rock), and fertilizers have a key role in supporting income for the farming population. The reliance on imports is a risk factor as it subjects India to price fluctuations on international commodity markets. Higher fertilizer prices and weaker exchange rates made imported fertilizers more expensive, raising sharply the total subsidy requirement for year.