India has floated a global tender to import 1.7 million tonnes of urea, a widely used nitrogenous fertilizer, ahead of the upcoming monsoon sowing season as the West Asia conflict continues to disrupt gas supplies for domestic production .
The tender, issued by state-run National Fertilizers Ltd. (NFL), seeks 900,000 tonnes for delivery through the country’s west coast and the remaining 800,000 tonnes via the east coast, according to a notice on the company’s website. Shipments must leave the loading port by July 20 to align with peak stocking before large-scale planting of rice, maize and soybeans begins .
Second tender since Iran war began
This is the second such procurement since the US-Israeli conflict with Iran began in late February. India bought 2.5 million tonnes in its previous tender in April at prices nearly double pre-conflict levels . Before the war, urea from the Middle East—a major supplier to India—was quoted at approximately 490pertonne;theApriltenderwasfinalizedataround935-959 per tonne .
The sharp price escalation reflects the scale of disruption. Nearly 45% of global urea supply transits through the Persian Gulf, and the effective closure of the Strait of Hormuz has choked trade flows and sent freight and insurance costs soaring .
Production disrupted by LNG shortage
India’s domestic urea production depends heavily on natural gas—much of it imported as LNG from the Middle East—to produce ammonia, a key feedstock. Tighter LNG supplies following the closure of the Strait forced several South Asian producers to shut plants in March, curtailing domestic output .
To stabilize local supplies, the government increased gas allocation to fertilizer plants to around 90% of average consumption from 70-75% earlier, after LNG availability improved through alternative sourcing arrangements. India has also diversified imports, securing supplies from Russia, Egypt, Qatar and Nigeria .
Kharif requirements and current stocks
India requires approximately 39 million tonnes of fertilizer for crops grown during the June-September kharif season, according to the fertilizer ministry. Current inventories stand at about 20 million tonnes, supported by domestic production and imports already received at Indian ports .
Government’s broader fertilizer push
The urea tender is part of a larger government effort to secure adequate nutrients ahead of the monsoon. Indian Potash Ltd (IPL) recently agreed to import a record 1.35 million tonnes of DAP (di-ammonium phosphate) in a single tender—equivalent to about a quarter of India’s annual DAP imports—at approximately $930-935 per tonne .
The government has also encouraged fertilizer companies to source collectively from global markets to negotiate better rates amid elevated prices. India plans to import over 8 million tonnes of fertilizers—6.4 million tonnes of urea and 1.9 million tonnes of other fertilizers—before the kharif season .
Subsidy bill to rise
The West Asia crisis is expected to push India’s fertilizer subsidy bill for FY27 to over ₹2 lakh crore, a 20% increase from the budgeted ₹1.71 lakh crore, due to the spike in global rates. The last time the annual subsidy crossed ₹2 lakh crore was in FY23, during the Russia-Ukraine war .
Outlook
As the kharif sowing window approaches and the West Asia situation remains volatile, India’s aggressive procurement strategy reflects the critical importance of fertilizer availability for food security. With global urea prices expected to stay elevated, the government’s subsidy burden—and the cost to farmers—will remain under pressure through the planting season .
