New Delhi: On February 28 this year, Finance Minister Nirmala Sitharaman had expressed concern over the impact of the Russia-Ukraine war on India’s trade,” particularly to the farming sector.
The apprehension seems to be coming true.
India might have to look for alternative suppliers of fertilisers in the wake of Russia’s war with Ukraine. Russia is the world’s largest exporter of fertilisers, accounts for around 20% of the global supplies of potash.
India also uses potash, phosphate and nitrogen-containing fertilisers. If Russia considers a halt to fertiliser exports following western sanctions, India has reason to worry.
Losing Russia and their large export volumes would be a severe supply-side shock to the market, according to Alexis Maxwell, an analyst at Bloomberg’s Green Markets.
India imports four types of fertilisers: urea, diammonium phosphate, muriate of potash and nitrogen-phosphorous-potassium. It subsidises potash to make it more affordable for farmers. Its annual budget allocated about Rs 1.05 lakh crore to its fertiliser-subsidy programme in February this year.
With a requirement of 30 lakh tonnes, India’s potash requirement is totally met by imports from Belarus and Russia. In November 2021, Russia’s fertiliser exports to India jumped by a whopping 469% to $106 million from over a year ago, according to the international trade data platform Observatory of Economic Complexity, the report added.
“We are trying to get diammonium phosphate and muriate of potash from Jordan, Morocco and Canada to meet the fertiliser requirement for the next financial year,” Kishor Rungta, chairman at Fertiliser Association of India (southern region), told the BusinessLine.
In a bid to insulate farmers against rising prices, the Indian government is also preparing to negotiate with Russia for the long-term supply of fertilisers for the first time in 30 years, Reuters reported, Quartz India reported.
