Analysis: As Iran War Eats Into India's Urea Supply, What Are Our Options
If the conflict continues, Indian farmers could face a severe shortage of chemical fertilisers, while taxpayers may have to shoulder a significantly higher subsidy burden.
Published : March 29, 2026 at 11:51 AM IST
The Iran War has impacted the supply of India's critical nitrogenous agri-chemical urea. The price of fertilisers has been peaking due to the blockade of the Strait of Hormuz and adjacent sea routes. But since the attacks on oil and gas infrastructure intensified both in Iran and the Gulf Cooperation Council (GCC) regional union comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, the overall global availability and production of LNG and agri-chemicals have taken a major hit.
Unlike last year, the current escalation of conflict involving Iran has made the crisis feel far more immediate and real. Retaliatory strikes on GCC countries, including Qatar, and the blockade of the Strait of Hormuz have fueled widespread anxiety among people, including Indian farmers.
Global prices of key fertilisers have surged: urea has risen by 50% to $720 per tonne, ammonia to $600 per tonne. Experts warn that complex fertilisers such as di-ammonium phosphate (DAP) could reach $1,000 per tonne (FOB). In the long term, urea prices may also cross the $1,000 mark.
This is not the first time fertiliser markets have been disrupted. In recent years, prices spiked due to the Ukraine-Russia conflict, as sanctions on Russia and instability in the Black Sea region disrupted exports of critical agricultural inputs. Russia is a major global supplier of fertilisers such as urea, potash (muriate of potash), phosphorus-based products, and NPK formulations. Supply delays and high costs during that period had already dampened agricultural production across several countries.
Urea Plants Take A Hit
With India already struggling to secure sufficient cooking gas, the situation is even more alarming for domestic urea plants, which depend almost entirely on LNG from the Gulf as a key input. As supplies tighten, production has declined and could come to a complete halt if LNG shortages persist. Similar disruptions are already visible in neighbouring countries, with several plants in Bangladesh and Pakistan ceasing operations.
India too depends on the Gulf region, especially Qatar and the Gulf, for its LNG supply, accounting for 60-70% of our total usage. Now, with the disruption of the trade, Indian urea and fertiliser plants have also started to function at lower capacity. In the initial days of the ongoing war, they reduced capacity to 70% and are now functioning at half their capacity. If the conflict endures, India could face a significant drop in fertiliser production and eventually see a potential drop of 30-40% in food exports next year due to shortages of essential agri-chemicals.
Sulphur is another critical mineral which is sourced from the Gulf, mainly Saudi Arabia. About 80% of our total requirement is met with West Asian imports.
Between 2020 and 2025, India is estimated to have sourced around 49% of its urea fertiliser from the Gulf region. In 2025 alone, fertiliser imports from this region were valued at about $3.7 billion. Of this, mixed fertilisers (NPK) made up $2.2 billion, accounting for 31.1% of imports, while nitrogen-based fertilisers contributed $1.5 billion, or 30.3%.
If the conflict continues, Indian farmers could face a severe shortage of chemical fertilisers, while taxpayers may have to shoulder a significantly higher subsidy burden. The situation is particularly concerning given that farmer protests over fertiliser shortages were already seen last year. Under current conditions, a sharp rise in urea prices this year appears highly likely.
LNG Imports
If India is compelled to shift toward LNG imports from the United States, the cost and logistics become far more challenging. Transporting LNG from the Gulf typically costs around $20 per tonne for freight and insurance, whereas shipments from the US can cost roughly $80 per tonne. Transit times also increase sharply, from about 8-10 days from the Gulf to as long as 45-60 days from the US, adding further strain to already stretched supply chains.
The government is now scrambling to find new supplies from Russia, Belarus and even China, which have an ample store of critical agri-chemicals and also fossil fuels. Unfortunately, following pressure from the US, India’s relationships with Russia and China have been strained, and we are finding it hard to get the discounts on fossil fuels and agri-chemicals that we once got from Russia. This additional burden will make food more expensive in India.
Even the UN’s Food and Agriculture Organisation (FAO) has warned that the current crisis is a “double shock for farmers” and the “medium-term effects will be felt by the farmers globally in the next season.”
So what are our options?
Firstly, we have to aggressively court Russia and our other BRICS partners, which include Iran and China. This means we have to have a policy similar to the one we adopted with Ukraine. India stood with Russia throughout, and at times, when it was pressured by the US, abstained from voting against Russia.
Similarly, we have to condemn war in Iran and begin exchanging food for oil and gas tankers with Iran. India has agricultural and food power, which should be used as a leverage to stop the domestic price crash and also aid our civilisational partner, Iran.
It is also time to normalise relationships with China and stay neutral towards Israel. No doubt Israel has helped us in critical points, but the US cannot be trusted to serve India’s national interests. The Trump regime has been bullying India, and we are paying a heavy price for it. Given that India is hosting the BRICS this year, we should propose a non-political agri platform for sanctioning free trade of fossil fuels, agri-chemicals, food and water. This platform should ditch the dollar and choose a national or BRICS currency to safeguard food security in all countries.
Surprisingly, the word urea comes from the French word urée, which is rooted in Greek ouron, which basically means ‘urine’. Fortunately, with a population of 1.5 billion people and a growing cattle population, we have ample urine. Now, in older times extraction of urea from urine was a complex and expensive process, but only last year, with new technology breakthroughs, the technique has become very cheap and easy. All it needs is 100 sq meters of land and about 20,000 people to provide the urine. This is where our modern metro cities can play a role. Major urban centres like Delhi, Mumbai, Banglore, etc can become major urea production hubs.
On a trial basis, the government of India should start a pilot project in Delhi, Mumbai and Bangalore airports, which get over 150,000 people daily. With simple modifications to the restroom systems, these airports can segregate urine and pipe it to facilities nearby, where fresh urine can be converted to percarbamide, a peroxide, using a simple electrochemical process.
Cow farms can also adopt the same process to convert cow urine into nitrogenous fertiliser in the same way. If the government is keen to promote cow welfare, then bio-CNG-to-urea plants can be developed across many districts. This step will solve the problem of unclaimed cattle and also help India become more self-sufficient in urea production.
(Disclaimer: The opinions expressed in this article are those of the writer. The facts and opinions expressed here do not reflect the views of ETV Bharat)
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