How the Iran–Hormuz Conflict Could Affect India’s Fertiliser System
Global conflicts disrupt supply chains; fertilisers depend on gas, shipping, and imports, making India’s agriculture sensitive to geopolitical risks.
Most people think wars only affect oil prices. But the Iran–Hormuz conflict is quietly creating pressure in another critical area: fertilisers.
India depends heavily on fertilisers like urea, DAP, and NPK to support agriculture. While India produces most of its urea domestically, the key ingredient behind it is natural gas. A large share of that gas travels through the Strait of Hormuz.
When shipping routes become risky, LNG cargoes slow down or stop. That means fertiliser plants may not get enough gas to run at full capacity. Some Indian plants have already reported reduced gas allocations, which can lower production.
At the same time, many fertilisers are imported from Middle Eastern countries. If ports in the Persian Gulf slow down due to conflict, global supply tightens. Prices rise everywhere — including India.
There is another layer: shipping insurance. When insurers raise war-risk premiums, fewer ships are willing to move cargo through the region. Even if fertiliser is available, transporting it becomes harder and more expensive.
Right now, India has buffer stocks and the kharif sowing season begins only in June. That gives the system some breathing space. But if the disruption continues for several months, supply pressure and subsidy costs could increase significantly.
For farmers, retail prices may not immediately change because the government absorbs much of the cost through subsidies. However, the financial burden shifts to the system higher subsidy bills, tighter supply management, and increased import costs.
Coromandel International