Fertilizer Sector reforms – NBS, bio-fertilizers, Neem coating, etc.

Fertlizer subsidy issue


From UPSC perspective, the following things are important :

Prelims level : Di-ammonium fertilisers

Mains level : Paper 3- Reducing the cost of fertiliser imports


The global prices of urea, DAP, MOP, phosphoric acid, ammonia and LNG have soared by two to two-and-a-half times in the last year

Resource richness of Indian agriculture

  • No country has as much area under farming as India.
  • Land under cultivation: At 169.3 million hectares (mh) in 2019, its land used for crop cultivation was higher than that of the US (160.4 mh), China (135.7 mh), Russia (123.4 mh) or Brazil (63.5 mh).
  • Ample water: With its perennial Himalayan rivers and average annual rainfall of nearly 1,200 mm – against Russia’s 475 mm, China’s 650 mm and the US’s 750 mm – India has no dearth of land, water and sunshine to sustain vibrant agriculture.
  • But there’s one resource in which the country is short and heavily import-dependent — mineral fertilisers.

India’s important dependence

  • In 2021-22, India imported 10.16 million tonnes (mt) of urea, 5.86 mt of di-ammonium phosphate (DAP) and 2.91 mt of muriate of potash (MOP).
  • Import value: In value terms, imports of all fertilisers touched an all-time high of $12.77 billion last fiscal.
  • In 2021-22, India also produced 25.07 mt of urea, 4.22 mt of DAP, 8.33 mt of complex fertilisers (containing nitrogen-N, phosphorus-P, potassium-K and sulphur-S in different ratios) and 5.33 mt of single super phosphate (SSP).
  • Import of raw material: The intermediates or raw materials for the manufacture of these fertilisers were substantially imported.
  • Total value of fertiliser imports: The total value of fertiliser imports by India, inclusive of inputs used in domestic production, was a whopping $24.3 billion in 2021-22.

Two costs involved in import

  • 1] Foreign exchange outgo for import: The first is foreign exchange outgo:
  • Imports are mostly from the following countries:
  • Urea: Imported from China, Oman, UAE and Egypt
  • DAP: Imported from China, Saudi Arabia and Morocco.
  • MOP: Imported from Belarus, Canada, Russia, Israel and Jordan.
  • LNG: Imported from Qatar, US, UAE and Nigeria.
  • Ammonia: Morocco, Jordan, Senegal and Tunisia (phosphoric acid); Saudi Arabia and Qatar.
  • Rock phosphate: Jordan, Morocco, Egypt and Togo.
  • 2] Fiscal cost: The second cost is fiscal.
  • Fertilisers are not only imported but also sold at subsidised prices.
  • The difference is paid as a subsidy by the government.
  • That bill was Rs 1,53,658.11 crore or $20.6 billion in 2021-22 and projected at Rs 2,50,000 crore ($32 billion) this fiscal.
  • Unsustainably high costs: Both costs are unsustainably high to bear for a mineral resource-poor country.


1] Reduce consumption of high-analysis fertilisers

  • There is a need to cap or even reduce consumption of high-analysis fertilisers – particularly urea (46 per cent N content), DAP (18 per cent N and 46 per cent P) and MOP (60 per cent).
  • Incorporate urease and inhibition compounds in urea: This can be done by incorporating urease and nitrification inhibition compounds in urea.
  • These are basically chemicals that slow down the rate at which urea is hydrolysed and nitrified (which increases leaching).
  •  By reducing ammonia volatilisation and nitrate leaching, more nitrogen is made available to the crop, enabling farmers to harvest the same yields with a lesser number of urea bags.
  • Liquid nano-urea: Together with products such as liquid “nano urea” –it is possible to achieve a 20 per cent or more drop in urea consumption from the present 34-35 mt levels.
  • Liquid nano-urea with their ultra-small particle size is conducive to easier absorption by the plants than with bulk fertilisers, translating into higher nitrogen use efficiency.

2] Promote the sale of SSP and complex fertilisers

  • A second route is by promoting sales of SSP (containing 16 per cent P and 11 per cent S) and complex fertilisers such as “20:20:0:13” and “10:26:26”.
  • Restrict DAP use: DAP use should be restricted mainly to paddy and wheat; other crops don’t require fertilisers with 46 per cent P content. 
  • India can also import more rock phosphate to make SSP directly or it can be converted into “weak” phosphoric acid
  • The latter, having only about 29 per cent P (compared to 52-54 per cent in normal “strong” merchant-grade phosphoric acid), is good enough for manufacturing “20:20:0:13”, “10:26:26” and other low-analysis complex fertilisers.

3] Incorporate MOP into complexes

  • As regards MOP, roughly three-fourths of the imported material is now applied directly and only the balance is sold after incorporating into complexes.
  • It should be the other way around.
  • India, to re-emphasise, needs to wean its farmers away from all high-analysis fertilisers. 

4] Use of NPKS complexes and indigenous sources

  • The moment to use more NPKS complexes and SSP, is already happening.
  • It requires a concerted push, alongside popularising high nutrient use-efficient water-soluble fertilisers (potassium nitrate, potassium sulphate, calcium nitrate, etc).
  • Exploiting alternative indigenous sources needs to be considered (for example, potash derived from molasses-based distillery spent-wash and from seaweed extract).

5] Revise nutrient application recommendations

  • Farmers need to know what is a suitable substitute for DAP and which NPK complex or organic manure can bring down their urea application from 2.5 to 1.5 bags per acre.
  • It calls for agriculture departments and universities not just to revisit their existing crop-wise nutrient application recommendations, but disseminating this information to farmers on a campaign mode.


The costs associated with the use of fertilisers are unsustainably high to bear for a mineral resource-poor country such as India. We need to act on the measures to reduce our import dependence.

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Back2Basics: High-analysis fertilisers

  • Fertilizers that have more than 30% total available nutrients are called high analysis fertilizers, whereas those with less than 30% total available nutrients are called low analysis fertilizers.
  • A 15-15-15 is a high analysis fertilizer; a 5-10-10 is a low analysis fertilizer, and a 10-10-10 is right on the borderline.

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