Will the West Asia war affect Kharif yields?

Nonetheless, the broader geopolitical tensions remain a cause of concern, as about 60 per cent of India’s imported liquified natural gas (LNG), a significant share of chemical fertilisers, and agro-chemical inputs – needed to sustain the agriculture sector – pass through the Strait of Hormuz (a waterway between the Persian Gulf and the Gulf of Oman). 

Food security for 1.4 billion people

The agriculture sector is specifically vulnerable to disruption in the supply of energy and fertilisers, with higher cultivation costs carrying serious consequences for food security for 1.4 billion people. In India, agricultural activities, such as irrigation, ploughing, seeding, harvesting, and transportation, depend on crude oil and its byproducts. 

Notably, farmers often compensate for increased fertiliser costs by lowering their application rates, which can affect crop yields and overall grain availability, potentially fuelling food inflation. While the government has taken steps to secure urea supplies ahead of the kharif season, higher LNG prices continue to raise the production costs of domestic fertilisers.

The fertiliser sector accounts for close to 29 per cent of India’s total natural gas consumption, and over half of India’s natural gas consumption requirement is met by imports. However, the West Asia war has disrupted the supply of natural gas. In addition, India imports about 30 percent of its total fertiliser requirement, but the war has also affected its supply. 

Import dependence 

India is currently 15-20 per cent import-dependent for Urea and NPK-based fertiliser (nitrogen, phosphorus, potassium) demand, about 60 per cent of DAP (Diammonium phosphate) requirement, and almost all of its Muriate of Potassium (MOP) needs.

According to the Ministry of Petroleum & Natural Gas, fertiliser requirement for the Kharif season is estimated at 390.54 lakh metric tonnes (LMT). Of which 180 LMT (46 per cent) is currently available. The availability of fertilisers shows a 36.6 per cent increase compared to 131.79 LMT available in March 2025. The stock of urea is currently at 61.51 LMT compared to 50.90 LMT last year.

Different nutrients within the fertiliser group vary significantly. Urea is the most used fertiliser, accounting for 55-60 per cent of India’s total fertiliser consumption and nearly 80 per cent of all nitrogenous fertilisers. Urea is widely used to supply the nitrogen essential for higher crop yields. As a result, the government has emphasised maximising domestic urea production.

Maximising domestic production 

In order to maximise domestic urea production, the government came up with the New Urea Policy (2015). According to the Ministry of Chemicals and Fertilisers, it helped raise the urea production from 207.54 LMT in 2014-15 to 306.67 LMT in 2024-25. However, domestic urea production heavily relies on liquefied natural gas (LNG), accounting for approximately 90 per cent of the production cost.

However, disruption in LNG supply due to tensions in West Asia will potentially affect future domestic urea production. Natural gas is the main input for ammonia, which is primarily required for urea production. 

Unlike crude oil, where supply sources are relatively diversified and backed by strategic petroleum reserves, LNG imports are largely sourced from Gulf countries and have limited buffer capacity. Imported LNG fulfills around half of India’s natural gas demand, and over 60 per cent of this volume transits through the critical global chokepoint – the Strait of Hormuz. 

Apart from issues of domestic production, the government also spends considerable amonunts to make these fertilisers accessible to farmers. Over the last few years, it has tried to rationalise allocations for fertiliser subsidies from ₹2,54,798.93 crore (2022-23) to ₹1,70,944 crore (2026-27) for the current fiscal year. And in view of the West Asia war, the government has approved a 12 per cent hike in P&K fertiliser subsidy. 

Targeted subsidies to stabilise prices and ensure balanced nutrient use are part of the broader policy framework.

Policy initiatives for balanced fertilisation

In 2010,  the government introduced the Nutrient-Based Subsidy (NBS) scheme. As part of this scheme, subsidies for Phosphatic and Potassic (P&K) fertilisers, such as DAP (Di-Ammonium Phosphate), are provided to make them affordable. It encourages balanced nutrient application and reduces excessive dependence on urea. 

Balanced fertilisation includes the use of macronutrients like Nitrogen (N), Phosphorus (P), Potassium (K), Calcium (Ca), Magnesium (Mg) and Sulphur (s), along with other micronutrients like iron (Fe), zinc (Zn), manganese (Mn), copper (Cu), as well as organic inputs such as manure, compost, and crop residues, etc. 

In 2015, the government launched the Soil Health Card scheme to provide farmers with a comprehensive understanding of the nutrient status and physicochemical properties of their soils. In the same year, it mandated 100 per cent neem coating of urea (urea treated with neem oil), which slows the release of nitrogen in the soil, thereby reducing nutrient losses and fertiliser overuse. 

Nano fertilisers 

The current crisis has reinforced the need to diversify fertiliser import sources and promote other substitutes, such as nano fertilisers. Nano Fertilisers are plant nutrients packaged in tiny particles called nanomaterials. 

Unlike conventional fertilisers, where nutrient losses and uncontrolled release are common, nano fertilisers allow nutrients to be released more slowly and absorbed by crops more efficiently, with minimal waste. India aims to replace 10 per cent of its conventional DAP and urea consumption with their nano substitutes in the next 3-4 years. 

Early field trials suggest that appropriate application of nano fertilisers, along with a basal dosage of conventional fertilisers, can help reduce the consumption of urea and phosphorus fertilisers by up to 50 per cent. Initiatives such as the Namo Drone Didi (NDD) are expected to help in the application of nano fertilisers and boost India’s agri-mechanisation push, with an overlay of ₹1,261 crore provided for 2023-24 to 2025-26.

The supply shock not only affected fertilisers and fuels, but also other agro-chemical products like pesticides, whose price is expected to increase by up to 20-25 per cent. 

Pesticide management

India is one of the largest producers of pesticides, with herbicides accounting for the largest share (44 per cent), followed by fungicides (27 per cent), and insecticides (22per cent). 

Average pesticide consumption in India is about 0.5 kg per hectare, significantly lower than the global average of 2.40 kg per hectare. While this suggests potential for increased pesticide usage, the national average conceals wide regional disparity. Yet, concerns are less about overall use and more about disproportionate application by a small group of farmers. 

The government has been working towards pesticide regulation. A draft Pesticides Management Bill, 2025, seeks to replace the Insecticides Act of 1968 and the 1971 rules, aiming to create a centralised regulatory framework. Key features include technology-driven transparency, stricter control over spurious pesticides, etc. 

How to better absorb future shocks

Hence, the tension in West Asia has exposed India’s vulnerability to its energy and fertiliser imports from geographically concentrated countries of the Gulf region. A few critical measures would help avoid such risks in the future, including:

– Boosting domestic production of fertilisers.

– Diversifying imports of energy and fertilisers. 

– Promoting alternatives such as nano fertilisers, bio-decomposers, and biofertilisers.

Moreover, there is also scope and need for structural reforms to better absorb such future shocks, especially amid rising prices of crude oil, LNG and fertiliser, as well as the potential impact of El Niño. 

Post read questions

Discuss the implications of India’s dependence on imported LNG and fertilisers for its agricultural sector with reference to the West Asia war.

Examine India’s fertiliser subsidy approach in the context of global supply shocks. Evaluate the effectiveness of the Nutrient-Based Subsidy (NBS) scheme in promoting balanced fertilisation.

Discuss the role of initiatives such as Soil Health Cards and neem-coated urea in improving fertiliser efficiency.

Examine the potential of nano fertilisers in reducing India’s fertiliser import dependence.

What are the major challenges faced by the Indian irrigation system in recent times? State the measures taken by the government for efficient irrigation management.

(Abhinav Rai is a Doctoral candidate at the Department of Geography, Delhi School of Economics, University of Delhi.)

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