India's fertiliser production sees weakest growth in 13 years in FY26

India's fertiliser output contracts in FY26, hit by LNG shortages and shutdowns, marking the sector's weakest performance in over a decade

India’s fertiliser production within the Index of Eight Core Industries recorded its weakest annual growth in 13 years in 2025-26 (FY26), contracting 0.1 per cent year-on-year (Y-o-Y). This marks the first negative print since the 3.3 per cent plunge in 2012-13 (FY13) — the first full year under the current series.

 

The slump caps a decelerating trend, with growth slowing from 3.7 per cent in 2023-24 to 2.9 per cent in 2024-25, in contrast to the sector’s average annual expansion of over 2.1 per cent since FY13.

 

The FY26 downturn intensified with a sharp 24.6 per cent contraction in March 2026 — the steepest single-month drop since monthly tracking began in April 2012.

 

Earlier March declines, including pandemic-era dips, pale in comparison, with no instance exceeding a 15 per cent fall over the past 14 years.

 

This March plunge dragged full-year growth into negative territory, despite gains in earlier months. “March production dipped sharply as most urea plants underwent premature annual maintenance shutdowns due to drying liquefied natural gas (LNG) supplies. As a result, actual urea output in March 2026 was nearly 27 per cent lower Y-o-Y at around 1.8 million tonnes (mt),” a senior industry executive said. 

 

In March 2026, India also produced around 900,000 tonnes to 1 mt of phosphorus and potassium fertilisers, down 16–24 per cent from March 2025, as raw material supplies tightened.

 

The executive said that India typically produces 2–2.5 mt of urea each month, but output fell sharply in March.

 

A closer look at the data shows that domestic fertiliser production also declined in the first quarter (April-June/Q1) of FY26, which may have contributed to the overall dip.

 

“In April, a large urea plant in North India shut down operations, leading to an immediate loss of 500,000–600,000 tonnes of production,” another senior executive said. He added that while output improved in subsequent months, the March slowdown offset earlier gains.

 

For complex fertilisers — largely diammonium phosphate (DAP) and nitrogen-phosphorus (NP)/nitrogen-phosphorus-potassium-sulphur (NPKS) — data shows that until January 2026, domestic DAP production was down about 1.6 per cent. This was offset by a nearly 12 per cent rise in NP/NPKS output, which is considered a better alternative due to its balanced nutrient profile.

 

Official sources expect domestic urea production in April to recover to around 2 mt, aided by improved LNG availability. While this would be about 11 per cent higher than March levels, it would still fall short of April 2025 output of 2.18 mt.