The government is reassessing the demand for green ammonia from domestic fertiliser manufacturers after several companies expressed interest in securing additional long-term supplies under the National Green Hydrogen Mission. The Ministry of New and Renewable Energy and the Department of Fertilisers are expected to hold discussions to evaluate the industry’s revised requirements and explore the possibility of expanding green ammonia procurement. The development marks a significant shift in the fertiliser sector’s approach toward green ammonia, which had initially witnessed cautious adoption due to concerns over pricing and commercial viability.
Supply Disruptions Drive Change in Industry Outlook
The fertiliser industry’s growing interest in green ammonia comes against the backdrop of supply disruptions and rising import costs triggered by geopolitical tensions in West Asia, particularly the ongoing conflict involving Iran. These disruptions have tightened the availability of conventional ammonia in global markets, resulting in increased price volatility and supply uncertainty. Consequently, fertiliser manufacturers are increasingly looking at green ammonia as a strategic alternative to strengthen supply security and reduce exposure to geopolitical risks. As market conditions evolve, many companies are now willing to enter into additional long-term supply agreements for green ammonia.
India’s Dependence on Imported Ammonia
India produces approximately 16.5 to 17 million tons of phosphatic and potassic fertilisers annually. However, the country remains heavily dependent on imported ammonia, a critical raw material used in fertiliser manufacturing. Given this dependence, fluctuations in international ammonia markets can have a significant impact on domestic fertiliser production costs and supply chains. The recent disruptions have further highlighted the need for alternative and reliable sources of ammonia.
National Green Hydrogen Mission Gains Momentum
Under the National Green Hydrogen Mission, the government awarded the country’s first green ammonia supply contracts during August and September 2025. Subsequently, fertiliser companies and green ammonia producers signed long-term purchase and supply agreements in March. Importantly, these agreements provide fixed pricing for a period of ten years, addressing one of the key concerns that had previously limited industry participation—price certainty. With conventional ammonia prices rising sharply, fertiliser companies have begun reassessing the economics of green ammonia procurement. The fixed-price structure is increasingly viewed as a hedge against future market volatility.
Rising Importance of Green Ammonia
The renewed interest in green ammonia is particularly significant considering India’s annual ammonia requirement of nearly 20 million tonnes, most of which is driven by the fertiliser sector. As demand continues to grow, green ammonia is emerging as a viable option for enhancing energy security, reducing import dependence, and supporting the country’s decarbonisation goals. Moreover, increased adoption of green ammonia could accelerate the development of a domestic green hydrogen ecosystem, creating new opportunities for investment and industrial growth.
Global Market Still in Early Stages
As reported by Et Energy World, despite growing interest, large-scale global demand for green hydrogen and its derivatives, including green ammonia, remains at an early stage. One of the primary challenges continues to be the cost differential between green ammonia and conventionally produced grey ammonia. However, ongoing geopolitical uncertainties, stricter sustainability requirements, and long-term energy transition goals are steadily improving the business case for green ammonia adoption. As a result, India’s fertiliser industry appears increasingly willing to embrace green ammonia as both a strategic and sustainable solution for securing future ammonia supplies.
