India’s fertilizer production decreased by 25% due to Iran war:What are reasons for decline in production what will be its impact?

US-Israel and Iran war has reduced India’s fertilizer production by nearly one-fourth in March. According to the Commerce Ministry, fertilizer production in March 2026 has decreased by 24.6% compared to March 2025. Actually, the supply of natural gas used in making fertilizers has been affected due to the Middle East war. Natural gas is used in making urea, which is an extremely essential fertilizer for Indian agriculture. For this, India is completely dependent on international energy prices and supply. Due to the war, movement through the Hormuz route has almost stopped. Energy and fertilizer-related raw materials are supplied through this very route. India depends on Gulf countries for 60% LNG and 40% urea According to the report, due to the closure of Hormuz, consignments of Liquified Natural Gas coming from Gulf countries are unable to reach India. India depends on these very countries for approximately 60% of its LNG requirement and 40% of urea. Meanwhile, about one-third of the world’s fertilizers also pass through this maritime route. After this disruption, experts and several international organizations have issued multiple warnings regarding the impact on food production. In India, farming is done on small plots of land and often production is not very high, but more than 45% of the country’s population depends on agriculture. India’s heavy dependence on imports for fertilizers Main Reasons for Decline in Fertilizer Production Impact of Reduced Fertilizer Production on India and Farmers 45% of India’s population depends on agriculture, so the impact of reduced fertilizer production could be significant What options does India have now? In such a crisis situation, the Indian government and industry can take these steps: 1. Short-Term Options 2. Long-Term Options Why is the Strait of Hormuz so important? The Strait of Hormuz connects the Persian Gulf to the Gulf of Oman and the Arabian Sea. It is only a 33 km wide maritime passage, but approximately 20% of the world’s oil and LNG (Liquefied Natural Gas) supply passes through here. Moreover, a large portion of gas and fertilizer coming from Gulf countries (Qatar, Saudi Arabia, UAE) also reaches Asia, including India, through this route. This same gas is the main raw material for urea production. This means if this route is blocked, the feedstock for fertilizer factories would stop. Additionally, about one-third of the world’s fertilizers also pass through this route. If supply from here is stopped, major importers like Europe, China, and Japan are also affected. Therefore, any disruption in Hormuz directly impacts global food production and inflation. Economic experts and institutions expressed concern ICRA rating agency’s Chief Economist Aditi Nayar said that this massive decline in fertilizer production could impact the sowing for the upcoming Kharif season (June-July). Meanwhile, some agricultural experts believe that if this supply chain is not restored soon, there could be a shortage of fertilizers in the country, which would reduce crop yields and could increase food inflation. Government said – Adequate buffer stock available for the season According to PIB, regarding the decline in food production, the government says that India currently has adequate buffer stock for the Kharif season. The government has started negotiations for alternative routes and supply from countries like Morocco or Jordan to mitigate the impact of the war. According to experts, this crisis is a ‘wake-up call’ for India to reduce dependence on foreign energy routes for its agricultural needs and move rapidly towards indigenous alternatives (such as nano fertilizers and organic farming).