Inside India's ₹1 Trillion Fertiliser Market: Growth, Supply Chains & Key Players

You usually don’t think about fertilisers unless you are directly connected to farming.

But once you start looking closely, you realise they sit quietly at the centre of something much bigger.

They connect global energy markets, geopolitics and India’s food security in a way that is easy to overlook but hard to ignore.

That is exactly why the fertiliser sector is back in focus today.

Rising geopolitical tensions in the Middle East have once again highlighted how dependent India is on global supply chains for critical inputs.

India relies on imported gas and raw materials to produce fertilisers, and in some cases, fertilisers are fully imported. This means disruptions do not stay contained.

They directly affect costs, supply and company margins, and eventually flow through to food prices and inflation. This dependence becomes more important when you look at the scale of the market.

India’s fertiliser market is already valued at over ₹1,021 billion and is expected to reach around ₹1,433.6 billion by 2034, growing at a steady pace of 3.8% annually.

India is also the second-largest consumer and the third-largest producer globally, which highlights how central this sector is to the economy.

Despite this scale, India is not fully self-sufficient.

The country consumes roughly 601 lakh metric tonnes of fertilisers annually, while producing about 503 lakh metric tonnes.

The gap is filled through imports of around 177 lakh metric tonnes, while exports remain negligible with just a 0.22% global share.

Domestic production has improved steadily from 385 lakh metric tonnes in FY15 to over 503 lakh metric tonnes in FY24, supported by policy push and capacity expansion.

But production still falls short of demand, keeping India structurally dependent on global markets.

This dependence varies across fertiliser categories.

India is largely self-reliant in urea, meeting around 87% of demand domestically, and in NPK fertilisers, where about 90% is produced within the country.

However, only around 40% of DAP is produced domestically, while potash is entirely import-dependent.

So while parts of the system are stable, others remain highly exposed.

The demand side is equally concentrated.

Chemical fertilisers dominate usage, accounting for over 80% of the market, with urea alone contributing around 40%.

Most fertilisers are used in dry form and almost entirely for farming, with a significant share of demand coming from North India.

This concentration improves efficiency but also increases vulnerability if any key segment is disrupted.

On the production side, the private sector leads with nearly 58% share, followed by cooperatives and the public sector.

While this supports scale and distribution, it does not eliminate the core challenge, which lies in dependence on external inputs.

That dependence is most visible in the link between fertilisers and energy.

Even when fertilisers are produced domestically, the inputs often are not.

Nearly 70 to 80% of urea production cost comes from natural gas, much of which is imported as LNG from countries like Qatar and transported through critical routes such as the Strait of Hormuz.

Similarly, DAP imports are linked to suppliers in the Middle East, while potash is fully imported with no domestic reserves.

This tightly connects India’s fertiliser security to global energy flows and trade routes.

When these flows are disrupted, the impact is immediate.

On March 3, 2026, Petronet LNG invoked force majeure, leading to a sharp drop in gas supply to industries.

Fertiliser plants received only about 70% of their required allocation, forcing some urea plants to shut down while others advanced maintenance shutdowns.

What began as an energy disruption quickly translated into supply stress.

India does maintain buffer stocks, which provide short-term relief.

Fertiliser reserves were up over 36% year-on-year as of early March.

However, the actual cushion is limited.

Urea stocks can cover less than two months of demand, while DAP and NPK offer just over three months.

This means short disruptions can be managed, but prolonged ones can tighten availability quickly.

For fertiliser companies, this creates a different operating environment.

Performance is no longer driven only by agricultural demand.

It depends on access to raw materials, energy efficiency and the ability to navigate government subsidy structures.

In a volatile global setup, companies with better sourcing strategies and stronger integration tend to be more resilient.

The larger takeaway is simple.

Fertilisers are no longer just an agricultural input.

They sit at the intersection of energy markets, global geopolitics and food security.

When global energy routes are disrupted, the impact does not stop at fuel prices.

It reaches farms, affects crop output and eventually shows up in food prices.

Once you start looking at fertilisers through this lens, this becomes a critical link in understanding how the broader economy functions.

Sources:

• IMARC Group
• PIB
• OEC World
• Wright Research
• Screener