Indian Fertilizer Industry

The Indian Fertilizer Industry has achieved an all-time high fertilizer production in 2025. Read here to learn more about the domestic fertilizer industry.

The Indian fertilizer industry plays a pivotal role in sustaining agricultural productivity, food security, and farmer incomes in a country where nearly half the population depends on agriculture.

Recent years have witnessed renewed momentum in domestic fertilizer production, driven by policy support, revival of idle capacities, assured raw material availability, and indigenous technological innovation.

Indian Fertilizer Industry

Record Output

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• India’s total domestic fertilizer production (Urea, DAP, NPKs, and SSP) reached a record 524.62 Lakh Metric Tonnes (LMT) in 2025.
• This reflects a steady upward trend over the past few years, reversing earlier stagnation caused by plant closures and raw material constraints.

Reduced Import Dependence

• About 73% of India’s total fertilizer requirement is now met through domestic production (2025).
• Import dependence, especially for urea, has declined significantly, though phosphatic fertilizers still rely partly on imports due to limited domestic reserves of rock phosphate.

Composition of Production

• Urea remains the dominant fertilizer, reflecting India’s cereal-centric cropping pattern.
• Complex fertilizers (DAP and NPKs) and Single Super Phosphate (SSP) production has also improved, aided by policy incentives and decentralised manufacturing.

Significance of Growth of the Indian Fertilizer Industry

1. Fiscal Prudence

• Reduced fertilizer imports help lower the Current Account Deficit (CAD).
• Domestic production moderates the fertilizer subsidy bill, which otherwise rises sharply during global price spikes in natural gas and phosphates.

2. Price Stability for Farmers

• Domestic availability shields Indian farmers from international supply shocks, geopolitical disruptions, and volatile global fertilizer prices.
• Stable fertilizer prices help contain food inflation, benefiting both producers and consumers.

3. Food Security

• Fertilizers are critical for maintaining crop yields and soil productivity.
• Assured and timely availability supports India’s ability to feed its large population and maintain buffer stocks under the Public Distribution System (PDS).

4. Strategic Autonomy

• Reduced dependence on imports enhances agricultural and economic sovereignty, especially during global crises such as pandemics or conflicts affecting supply chains.

Key Initiatives Driving Domestic Fertilizer Production

1. Revival of Closed Fertilizer Units

Several dormant public sector fertilizer plants have been revived using modern technology and gas-based feedstock:

• Gorakhpur (Uttar Pradesh)
• Sindri (Jharkhand)
• Barauni (Bihar)
• Ramagundam (Telangana)

These revivals have substantially increased domestic urea capacity, reduced regional supply imbalances, and generated local employment.

2. Assured and Strategic Raw Material Sourcing

• Long-Term Agreements (LTAs) for critical inputs such as:
  • Rock phosphate
  • Phosphoric acid
  • Natural gas
• Diversification of import sources to avoid overdependence on any single country or region.

This has improved supply security and production planning for domestic manufacturers.

3. Indigenous Technology and Innovation

• Promotion of Make in India through:
  • Liquid Nano Urea
  • Nano DAP
• These nano-fertilizers:
  • Improve nutrient use efficiency
  • Reduce excessive chemical fertilizer consumption
  • Lower logistics costs due to smaller quantities required

They also align with sustainable agriculture and soil health goals.

4. Policy Support and Regulatory Reforms

• Nutrient-Based Subsidy (NBS) for phosphatic and potassic fertilizers.
• Gas pooling and priority allocation of natural gas for fertilizer plants.
• Support for Single Super Phosphate (SSP) units using domestic rock phosphate and pyrites.

Impact on India’s Food Security

1. Ensuring Stable Agricultural Output

• Fertilizers are critical inputs for Green Revolution crops like rice and wheat.
• 73% domestic production (2025) ensures an uninterrupted supply during global disruptions (e.g., Ukraine war, West Asia crisis).
• Prevents production shocks that could threaten buffer stock maintenance under the Public Distribution System (PDS).

2. Price Stability & Farmer Protection

• Reduced import dependence cushions Indian farmers from global fertilizer price volatility.
• Controlled input costs help contain food inflation, a key macroeconomic concern.
• Supports affordability of cultivation for small and marginal farmers ( about 85% of holdings).

3. National Food Security Architecture

• Reliable fertilizer supply sustains:
  • MSP-based procurement
  • National Food Security Act (NFSA)
  • Integrated Child Development Services (ICDS)
• Any disruption in fertilizer availability directly impacts grain availability and nutrition security.

Impact on Climate Policy & India’s NDCs

1. Reducing Emissions Intensity in Agriculture

• Fertilizer manufacturing is energy-intensive (especially urea).
• Shift to gas-based plants lowers CO₂ emissions compared to naphtha-based units.
• Contributes to India’s emissions intensity reduction target (45% by 2030).

2. Nano Fertilizers & Climate Mitigation

• Nano Urea and Nano DAP:
  • Reduce excessive nitrogen application
  • Lower nitrous oxide (N₂O) emissions (≈300 times more potent than CO₂)
• Aligns with climate-smart agriculture and sustainable nutrient management.

3. Efficient Resource Use & Soil Carbon

• Balanced fertilization improves soil health, enhancing soil carbon sequestration.
• Prevents land degradation and desertification, supporting India’s land degradation neutrality goal under UNCCD.

Impact on Climate Adaptation & Resilience

• Domestic fertilizer availability helps farmers adapt to:
  • Erratic monsoons
  • Reduced soil fertility due to climate stress
• Supports yield stability amid climate variability.
• Essential for maintaining food production in rainfed and vulnerable regions.

Support for Circular Economy & Sustainability

• Promotion of SSP and bio-fertilizers reduces reliance on energy-intensive inputs.
• Encourages recycling of industrial by-products (e.g., phospho-gypsum).
• Supports India’s Long-Term Low Emissions Development Strategy (LT-LEDS).

Challenges Facing the Fertilizer Industry

• High subsidy burden continues to strain public finances.
• Overuse of urea leads to nutrient imbalance and soil degradation.
• Continued dependence on imports for phosphorus and potassium due to limited domestic mineral reserves.
• Environmental concerns related to fertilizer runoff, groundwater pollution, and greenhouse gas emissions.

Way Forward

• Balanced fertilization through promotion of NPK usage and soil-test-based application.
• Scaling up nano and bio fertilizers to reduce chemical intensity.
• Strengthening domestic exploration of phosphatic minerals and alternative sources.
• Integrating fertilizer policy with Natural Farming, Soil Health Card, and climate-resilient agriculture initiatives.
• Gradual reform of subsidy mechanisms to target farmers directly and improve efficiency.

Conclusion

The recent growth of the Indian fertilizer industry marks a strategic shift from import dependence to domestic resilience. By reviving idle capacities, securing raw materials, and adopting indigenous innovations like nano-fertilizers, India is strengthening its agricultural backbone.

Sustaining this momentum while addressing environmental and fiscal challenges will be crucial for ensuring long-term food security, farmer welfare, and economic stability.

Related articles:

• One nation one fertilizer
• Environment-friendly fertilizer
• Nutrient-based subsidy scheme