Mumbai, July 28 After China halted critical fertiliser supplies, the Indian manufacturers are increasing domestic output through advanced technologies and new formulations, according to a report on Monday.
India’s fertiliser industry is expected to grow at a CAGR of 4.2 per cent, reaching $16.58 billion by 2032.
In FY25, total fertiliser production increased to 51 MT, supported by flagship schemes such as PM-KISAN and PM-Garib Kalyan Yojana, CareEdge Ratings said in its report.
After restrictions on rare earth elements, China halted its speciality fertilisers and key phosphate exports to India. In response to this, India has secured a five-year agreement with Saudi Arabia to import 3.1 million tonnes of Di-ammonium phosphate (DAP) annually, which is equivalent to approximately 30 per cent of its domestic requirement.
“This crisis presents a unique opportunity. With China pausing fertiliser supplies, Indian manufacturers are stepping up to bridge the gap by increasing domestic output, which will not only benefit them but also drive innovation, particularly through the adoption of advanced technologies and the development of new formulations," said Priti Agarwal, Senior Director at CareEdge Ratings.
"Policymakers, manufacturers, and farmers are collaborating to combat the issue with a combination of alternative sourcing, local production, and on-the-ground innovation,” she added.
China accounted for nearly 70 per cent of India’s speciality fertiliser imports during the June to December period in recent years. Now, India is signalling a decisive shift towards supply diversification and enhanced resilience by exploring alternatives like Saudi Arabia, Israel, Jordan, Russia, Oman, Morocco.
Chinese di-ammonium phosphate (DAP) supply to India began to decline in 2023, then dropped from 2.29 MT in FY24 to 0.84 MT in FY25, and there have been no shipments since early 2025.
Inspection clearances for DAP and speciality fertiliser shipments to India have been withheld since April 2025, blocking supplies while exports to other nations continue.
"Ensuring adequate inventory and timely distribution — through coordinated efforts between the government and private stakeholders should be the near-term focus. The recent agreement with Saudi Arabia for long-term DAP supply is a timely step in this direction,” said Sachin Mathur, Associate Director at CareEdge Ratings.
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