In 2025, India faced a significant fertiliser shortage despite a robust monsoon season, which spurred high agricultural demand. This shortage was primarily caused by a combination of a drop in domestic production, a decline in imports, and an underestimation of demand by the government.
Key Causes of the Shortage
• Surging Demand: An “excellent” southwest monsoon with well-distributed rainfall across 33 out of 36 meteorological subdivisions led to higher kharif sowing. This increased acreage, particularly for rice (7.6% rise) and maize (11.7% rise), directly drove a surge in demand for fertilisers.
• Decline in Domestic Production: From April to July 2025, domestic output of crucial fertilisers like urea fell from 102.1 lakh tonnes to 93.6 lakh tonnes. Production of Diammonium Phosphate (DAP) also remained stagnant.
• Reduced Imports: India’s imports of urea and DAP have been falling since 2023-24, largely due to supply restrictions from China, a major global exporter. This compounded the domestic production shortfall and created a significant supply gap.
• Underestimation of Demand: The government’s failure to accurately forecast the increased demand from farmers following the good monsoon led to inadequate buffer stocks. This was particularly evident for nitrogen-intensive crops like rice and maize, which require multiple applications of urea.
Impact and Policy Lessons
The shortage resulted in a steep depletion of fertiliser stocks by August 1, 2025, a critical period for kharif crops. Farmers were forced to queue for hours to secure limited bags of fertilisers, and many substituted DAP with alternatives like Ammonium Phosphate Sulphate (APS), also known as 20:20:0:13, which contains less phosphorus but has emerged as a popular choice due to its availability.
To prevent similar crises, experts suggest several policy changes:
• Advance Demand Forecasting: The government must improve its demand forecasting by considering seasonal factors like monsoon performance and crop acreage.
• Diversified Imports: Reducing over-reliance on a single country like China by securing long-term supply contracts with multiple global suppliers is crucial.
• Strengthening Domestic Production: There is a need to invest in and expedite the commissioning of new domestic fertiliser plants to reduce import dependency and enhance self-reliance.
• Sustainable Practices: Promoting sustainable agricultural methods, such as the use of nano-urea and bio-fertilisers, can reduce the overall dependency on chemical fertilisers and help in long-term resilience.