The data showed that till February the government spent around ₹1.88 trillion as while the RE for FY26, according to the Budget documents, was slightly more than ₹1.86 trillion.
This means that even before the war, India had spent around ₹1,513 crore more on this than what its Budget presented on February 1 had estimated.
According to experts, this is largely due to huge imports and the consumption of urea, di-ammonium phosphate (DAP), and nitrogenous-phosphorus/nitrogenous-phosphorus-potassium-sulphur (NP/NPKS) before the war broke out.
The industry data shows that between April and January 2025-26, India imported close to 83 per cent more urea than in the corresponding period of the previous year while it imported almost 40 per cent more DAP.
NP/NPKS imports in April-January were almost 103 per cent more than in the corresponding period of the previous year.
India is said to have consumed an all-time high of almost 40 million tonnes of urea in FY26.
The crisis started in early March, when the Supreme Leader of Iran Ayatollah Ali Hosseini Khamenei was assassinated in an overnight operation by the United States.
Iran retaliated by attacking American bases in West Asia.
The war also closed the Strait of Hormuz, effectively shutting out supplies of oil, gas, and fertilisers from Gulf nations. Those account for significant global supplies.
Since early March, urea prices in the global markets have jumped from $460 per tonne to almost $850 now while DAP rates have also climbed 25-50 per cent to $850-1,000 per tonne.
Urea and DAP are the two most widely consumed fertilisers in India.
However, some experts have said that how much the RE for FY26 outstrips the earlier estimates remains to be seen as India contracted imports of around 1.3 million tonnes of urea in March, but those were at pre-war prices.
Moreover, the production of urea in March, according to the government’s assessment, dipped by almost 27 per cent as compared to March 2025 to around 1.8 million tonnes while 0.9-1.0 million tonnes of phosphorus and potassium fertilisers were produced, Those were 16-24 per cent lower than in March 2025.
The production dropped because supplies of liquefied natural gas (LNG) to fertiliser units had to be rationalised due to the war.
The Gulf region accounted for 20-30 per cent of India’s urea requirements and 30 per cent of DAP imports.
It also supplied nearly 50 per cent of India’s import of LNG, which is a key feedstock for urea production.
Not only that supplies of key raw materials such as ammonia, sulphur, and sulphuric acid, used in the domestic production of phosphorus and potassium fertilisers, have also been impacted due to the war.
The production of urea — a widely used nitrogen fertiliser — will return to normal levels from Friday, as some idled plants restart operations following an improvement in natural gas supplies, according to people familiar with the matter. Some manufacturers, including top producer Indian Farmers Fertiliser Cooperative Ltd, shut a few facilities or undertook routine maintenance after supplies of gas, a key feedstock, fell due to disruptions linked to the West Asia conflict. As a result, India’s urea production fell by about 800,000 tonnes in March, down from a normal monthly level of more than 2.6 million tonnes, said a person. India is one of the largest consumers and the biggest importer of the crop nutrient. (Bloomberg)
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