NEW DELHI: The West Asia conflict has disrupted India’s gas supplies, tightening a critical feedstock for fertilizers and exposing a deeper vulnerability in the country’s supply chain. The immediate risk is to domestic production and imports; the eventual impact is on subsidy costs and inflation.
As gas availability shrinks, fertilizer output is likely to come under pressure even as supplies from the region face disruption. While government policy shields farmers from price volatility, higher global prices feed directly into the subsidy bill. The experience of the Russia-Ukraine war showed how such shocks can also spill into food inflation.
The real exposure
India appears less import-dependent in fertilizers than in energy. Oil import dependence stands at 80-90%, and liquefied petroleum gas () at about 62%. Fertilizer imports account for roughly 30% of consumption.
That headline number masks wide variation across nutrients. Urea, the most used fertilizer, relies on about 20% imports, with similar dependence for Nitrogen, Phosphorus and Potassium (NPKs). For Diammonium Phosphate (DAP), import dependence rises to 50-60%, while Muriate of Potassium (MOP) is fully imported.
The risk is compounded by stress in domestic gas supply. The ongoing crunch has forced the government to divert supplies from industry to households, raising the prospect of lower fertilizer output even though domestic production meets about 70% of demand.
An analysis by the Indian Council for Research on International Economic Relations shows the dependence runs deeper. Including feedstock such as natural gas, rock phosphate, phosphoric acid, sulphur and ammonia, India’s effective import reliance rises to about 69%.
“Overall, these dependencies mean that India’s fertiliser security is not insulated from external shocks and market instability,” it noted in a March 2026 policy brief.
Shipment squeeze
The concentration of global supply in West Asia adds to the risk. The Strait of Hormuz is a critical artery not just for oil, but for fertilizers and their inputs.
According to the US-based The Fertilizer Institute, 45% of global sulphur trade, 34% of urea, and 23% of DAP and ammonia depend on countries directly involved in the conflict, including Bahrain, Kuwait, Iran, Israel, Saudi Arabia, Qatar and the United Arab Emirates. Including other at-risk countries such as Egypt, Jordan, Lebanon, Oman and Syria raises potential disruption further.
India is directly exposed. About 30% of its fertilizer imports come from West Asia, with Saudi Arabia alone accounting for 15%. After the Ukraine war, India increased purchases from Russia, raising its share from roughly 6-7% pre-war to about 18%.
Even so, reliance on West Asia has largely persisted. Iran’s share has fallen from around 10% in FY19 to negligible levels after US sanctions. China accounts for about 15%, down from 20-25% five years ago.
With supplies at risk, New Delhi is exploring alternatives, from Indonesia and Belarus to Morocco and China, .
India has built up fertilizer stocks of about 18 million tonnes, enough to cover roughly two months of consumption. With the kharif season still some time away, the buffer offers near-term relief.
The macro risk
The broader concern is the transmission to prices and public finances. The Russia-Ukraine war triggered a surge in crude, gas and fertilizer costs, driving inflation globally and in India. The current conflict risks a similar dynamic.
have risen as much as 30% since the start of the war. The World Bank’s food and fertilizer index shows that food prices tend to move in tandem with fertilizer costs, a pattern seen in past geopolitical disruptions in West Asia.
In India, subsidies shield farmers and food prices from fertilizer cost swings, but shift the burden to the government. During , the subsidy bill ballooned to around 2.5 times the initial budget, constraining spending and straining fiscal math.
That insulation is also incomplete. India’s food inflation rose from 5.9% in February 2022 to 7-8% in the following month after the war began. A global cereal crunch, driven by elevated fuel and fertilizer prices and the effects of El Niño in 2022, pushed domestic cereal inflation above 10% for more than a year from August 2022. The government responded with export restrictions on wheat and rice to manage prices.
The current year mirrors several of those conditions: a war, rising fuel and fertilizer prices, and the prospect of El Niño. The risk is that the shock extends beyond supply, weighing on both inflation and the fiscal position.