In a proactive move to ensure uninterrupted fertilizer supply, the government has directed all urea manufacturers to avoid scheduling plant shutdowns during the financial year 2025–26. The directive aims to prevent any shortfall in urea availability during the crucial kharif and rabi cropping seasons.
The Department of Fertilizers stated, “Considering the likely demand during the ongoing kharif season and the upcoming rabi season, it is imperative that urea-producing units take urgent steps and not plan any shutdown during FY2025-26”.
Rising Demand Meets Supply Constraints
Urea remains India’s most widely used nitrogen-based fertilizer, essential for enhancing soil productivity. While domestic production is substantial, it still falls short of national requirements, pushing India to rely heavily on imports.
In May 2025, India produced 22.36 lakh metric tons (LMT) of urea against a target of 22.86 LMT. Despite this shortfall, the government reported that urea availability exceeded sales for the month—indicating effective inventory management. However, continued production is critical to meet future demand.
China’s Export Curbs Worsen Fertilizer Stress
Compounding the issue is China’s ongoing export restrictions on phosphate, a key ingredient used in producing Di-Ammonium Phosphate (DAP)—India’s second-most consumed fertilizer. These curbs have persisted for over two months, triggering a DAP shortage early in the kharif season.
Beijing has also suspended shipments of specialty fertilizers, which are vital for improving the yield of high-value crops like fruits and vegetables. The reasons behind these export halts remain undisclosed, further adding uncertainty to India’s fertilizer supply chain.
Regulatory Challenges Undermining “Make in India”
Adding to the pressure, Indian fertilizer industry bodies have raised concerns about outdated domestic regulations that they claim are skewing the playing field in favor of foreign—particularly Chinese—manufacturers.
According to industry representatives, the concurrent structure of fertilizer regulation—shared between central and state governments—has resulted in a patchwork of amendments that fail to keep pace with changing domestic and global dynamics. They argue that this outdated framework has become a vestige of the “Inspector Raj” and “License Raj” era, stifling efficiency and innovation.
Industry Calls for Urgent Reforms
To modernize the sector and ensure competitiveness, industry bodies are urging the government to implement comprehensive reforms, including:
*A “One Nation, One Licence” policy
*Regulatory parity between domestic and imported fertilizers
*A cap on inspector numbers—limited to two per unit—to reduce bureaucratic burden
As reported by outlookbusiness.com, the reforms, they argue, are essential to foster a more level playing field, encourage domestic production, and strengthen the “Make in India” initiative.
