Impact of Iran Conflict on India's Fertiliser Supply Chain

The ongoing conflict in Iran poses a significant threat to India's fertiliser supply, impacting farmers and production costs. With over a quarter of fertiliser imports sourced from West Asia, disruptions could lead to higher prices and increased government subsidies. The situation is further complicated by rising LNG costs and a strengthening US Dollar. Prime Minister Modi has convened a meeting to address these challenges and ensure a stable supply of essential resources. Read on to understand the implications for India's agricultural sector.

By Narendra Chaudhary Mar 23, 2026, 15:34 IST

Challenges Arising from the Iran War

The ongoing conflict in Iran is emerging as a significant crisis for India, particularly affecting farmers who may face severe repercussions due to potential disruptions in fertiliser imports. A report from CareEdge Ratings indicates that approximately 26% of India's fertiliser imports are sourced from the West Asia region, making the country susceptible to supply interruptions amid rising geopolitical tensions.

According to the report's findings, West Asia contributes 26.2% of India's fertiliser imports, with Jordan providing 19.2% and Russia 15.5%. Other contributors include Morocco (10.4%), China (5.7%), Egypt (5.6%), Canada (3.8%), and Togo (3.6%), while the remaining 10% comes from various other sources.

This disruption could create significant challenges for India during the upcoming Kharif season, especially with growing concerns regarding the potential impact of El Nino. The anticipated supply shortages may lead to increased fertiliser prices, exacerbated by a surge in LNG prices, which are crucial for fertiliser production, thereby increasing the government's subsidy obligations.

Dependence on Middle Eastern Fertiliser Production

India relies heavily on imports from conflict-affected regions for essential components of domestic fertiliser production, including Liquefied Natural Gas (LNG), ammonia, sulphur, diammonium phosphate (DAP), urea, and Muriate of Potash (MOP). Notably, India's urea production is significantly reliant on LNG imports from Qatar, and as these supplies dwindle, several production facilities have already reduced their output.

Moreover, alternative sources are becoming increasingly costly. Russia, a key alternative supplier, has started to raise prices as many import-dependent nations seek its raw materials. Additionally, the US Dollar continues to strengthen against the Indian Rupee, leading to further increases in the cost of upcoming raw material shipments.

In response to the evolving situation in West Asia, Prime Minister Narendra Modi convened a high-level meeting on Sunday to assess the implications for the petroleum, crude, gas, power, and fertiliser sectors. The discussions aimed to ensure a steady supply, stable logistics, and effective distribution of essential resources throughout the nation.