India’s Urea Import Costs Keep Falling, Easing Subsidy Strain
21 September 2026, New Delhi, India: India’s cost of importing urea has fallen 57 percent since May, according to Department of Fertilisers data reported on September 15, offering the government meaningful relief on a subsidy bill that had been expected to balloon earlier this year because of a global supply squeeze.
The landed cost of imported urea stood at around 406 dollars a tonne as of mid-September, down from 947 dollars a tonne in May, the peak of this year’s price spike. Global urea prices were also down 23 percent year-on-year in August, reflecting improved availability after China eased export restrictions on fertilisers that had been in place since March. State trading agencies have purchased 4.74 million tonnes of urea through recent tenders, and India’s urea inventory stood at 7.51 million tonnes at the end of August, 78 percent higher than the same point last year.
The price decline has been steady rather than sudden. A National Fertilizers Limited tender floated on May 27 for 1.7 million tonnes drew bids of 444 to 449 dollars a tonne when it closed in early June, more than 50 percent below the 935 to 959 dollars a tonne India had been paying in April at the height of the crisis, a spike that had been linked in part to disruption in West Asia affecting gas-based fertiliser production costs. That tender alone attracted roughly 6.24 million tonnes worth of bids from about 34 companies, split fairly evenly between India’s east and west coast ports, a sign of how quickly global suppliers moved to fill the gap once China’s restrictions lifted. The latest data from mid-September shows the downward trend has continued through the kharif season.
Subsidy bill still likely to rise, just by less than feared
Despite the price relief, the Department of Fertilisers still expects the overall fertiliser subsidy to increase by an estimated 15,000 to 20,000 crore rupees this year. Earlier in the crisis, officials had warned the subsidy could overshoot its budgeted estimate of 1.7 lakh crore rupees for the current financial year by nearly double, reaching close to 3.4 lakh crore rupees if high import prices persisted through the full kharif and rabi cycle. The steady price declines since June mean that worst case now looks less likely, even though India had already locked in around 40 percent of its annual urea import requirement at the earlier, higher prices before the market turned. India’s kharif urea requirement for the season was also trimmed slightly, from 19.4 million tonnes to 19 million tonnes, as part of the government’s effort to manage the subsidy exposure.
For Indian farmers, cheaper imported urea does not immediately change the retail price at the shop counter, since urea remains sold at a government-fixed price regardless of import cost, with the subsidy absorbing the difference. But a smaller subsidy overshoot reduces pressure on the fertiliser ministry’s budget and lowers the risk of the kind of supply tightness or delayed payments to importers and cooperatives that can follow a period of subsidy strain. For global agri-input companies and traders, India remains one of the world’s largest urea importers, so a sustained drop in Indian buying prices is also a signal of genuinely looser global nitrogen fertiliser supply rather than a country-specific discount, which matters for producers and traders across the Middle East, Southeast Asia, and North Africa who compete for the same cargoes.
The bigger question is how long the relief lasts. Urea prices are sensitive to natural gas costs, since gas is the primary feedstock for nitrogen fertiliser production, and any renewed disruption in West Asia or a tightening of Chinese export policy could reverse the trend as quickly as it appeared. For now, though, India’s fertiliser planners have more breathing room heading into the rabi sowing season than they did just a few months ago.
Also Read: CropLife India Flags Narrowing Crop Protection Options for Farmers
Global Agriculture is an independent international media platform covering agri-business, policy, technology, and sustainability. For editorial collaborations, thought leadership, and strategic communications, write to pr@global-agriculture.com
