After Oil, Gas, Iran’s Hormuz Chokehold Raises Fertiliser Red Flag For India

Recent data indicates that India could face a 20 to 25 percent disruption in its fertiliser supply chain due to ongoing geopolitical tensions stemming from the war between the US, Israel, and Iran, along with an informal blockade of the Strait of Hormuz. This vulnerability threatens to impact the country’s agricultural sector, which sustains an estimated 147 crore population and supports millions of livelihoods.
The 12-day conflict involving the US and Israel against Iran has shifted battlefield tactics, notably through drone-led asymmetric assaults by Tehran, challenging conventional military interception strategies. While the immediate focus has been on energy supply disruptions—such as unpredictability in crude oil imports due to strikes on Middle Eastern refineries and shipping constraints caused by Iran’s unofficial blockade—the long-term repercussions on fertiliser imports are gaining concern.
India heavily relies on Gulf nations—UAE, Qatar, Saudi Arabia, and Oman—for fertiliser imports. Approximately 63% of India’s nitrogen fertiliser (including urea and ammonia) and 32% of DAP (di-ammonium phosphate) come from these countries. Saudi Arabia alone accounts for an estimated 42% of India’s potash imports. Although Iran’s direct share in fertiliser supplies is minimal—US$2.59 million worth in 2024—the indirect impact via shipping disruptions through the Strait of Hormuz poses a significant threat.
Despite some volatility—such as a 21% decline in urea imports in 2023—the overall trend suggests increasing dependence, with projected fertiliser imports reaching approximately US$18 billion in FY26. Urea is expected to constitute around 61% of this figure, as its price is controlled by the government.
The impact of these disruptions could be particularly severe during the upcoming sowing seasons in June and July, potentially causing price spikes due to increased shipping costs, insurance premiums, and supply shortages. Such challenges threaten to jeopardize food security and farmers’ livelihoods, especially if shortfalls persist.
The Indian government has assured that sufficient strategic reserves are in place and has directed increased domestic production of LPG cylinders to mitigate energy supply issues. However, the fertiliser sector remains vulnerable to the ongoing geopolitical crisis, underscoring the need for strategic resilience in India’s supply chains amid evolving global conflicts.