Govt allows Indian Potash Ltd to continue urea imports till March 2026

The government has allowed Indian Potash Limited (IPL) to import urea for another year. The company will continue importing the fertilizer on behalf of the government until 31 March 2026.

IPL will continue to import urea alongside government-owned public sector undertakings (PSUs), Rashtriya Chemicals and Fertilizers (RCF) and National Fertilizers Limited (NFL), which are already authorised importers of the key soil nutrient.

As per the notification issued by the Directorate General of Foreign Trade (DGFT) on Tuesday, IPL’s State Trading Enterprise (STE) status for urea imports on government account has been extended from 31 March 2025 to 31 March 2026.

Given that certain essential imports, like urea, are controlled by the government to ensure stable prices and availability, the government grants State Trading Enterprise (STE) status to a few selected entities instead of allowing private companies to import freely, authorising them to handle imports under government supervision.

India does not produce enough urea to meet demand and relies on imports from countries like Oman, China, and the UAE to fill the gap.

Also read: China’s supply cut and global disturbances reduces India’s fertilizer imports

While the country has been working to increase domestic production by reopening old fertilizer plants and setting up new ones, it still needs to import large quantities of urea every year. This extension signals that imports will continue to play a key role in meeting the country’s fertilizer needs.

By keeping IPL in charge, the government aims to protect farmers from sudden price hikes and ensure they receive fertilizers on time as the sowing season approaches.

Indian Potash Limited (IPL) is a government-backed but not government-owned company, dealing mainly in potash, urea, and other essential fertilizers needed by farmers.

Imports vs. production: The reality

Urea sales in the current fiscal year (FY25) saw a 6.4% increase, reaching 300.26 lakh tonnes by 31 December 2024, compared to 282.08 lakh tonnes in the same period last year. The total sales of all fertilizers combined grew by 7.3%, amounting to 525.92 lakh tonnes, although sales of Di-ammonium Phosphate (DAP) were lower, according to the latest government data.

Urea imports, which are regulated by the government, stood at 43.16 lakh tonnes during the first nine months of FY25, marking a 28.9% decline from 60.71 lakh tonnes in the previous year. In contrast, India had recorded a record-high urea import of 98.28 lakh tonnes in FY 2020-21.

Overall fertilizer imports also fell 18.4% to 120.54 lakh tonnes between April and December. The import of complex fertilizers dropped by 16.1% to 14.85 lakh tonnes from 17.71 lakh tonnes, while DAP imports declined by 19.1%, reaching 40.82 lakh tonnes compared to 50.47 lakh tonnes a year ago.

Also read: Privatization of fertilizer companies back on the menu, one small firm at a time

Domestic fertilizer production rose 1.6% to 391.62 lakh tonnes, which included 232.02 lakh tonnes of urea (compared to 237.09 lakh tonnes last year), 31.5 lakh tonnes of DAP (down from 34.2 lakh tonnes), 81.94 lakh tonnes of complex fertilizers (up from 73.85 lakh tonnes), 40.57 lakh tonnes of Single Super Phosphate (SSP) (compared to 35.58 lakh tonnes), and 5.59 lakh tonnes of Ammonium Sulphate (up from 4.66 lakh tonnes).

The government’s subsidy allocation for food and fertilizers in 2025-26 has been set at ₹3.71 lakh crore, reflecting a marginal increase of 0.70% over the current fiscal estimate. 

The food subsidy allocation for the next financial year stands at ₹2,03,420 crore, up from the revised estimate of ₹1,97,420 crore for 2024-25. The food subsidy expenditure was ₹2.11 lakh crore in 2023-24.

For fertilizer subsidies, the allocation for 2025-26 has been reduced to ₹1.67 lakh crore, compared to the revised estimate of ₹1.71 lakh crore for 2024-25. In the previous year, the government had earmarked ₹1.88 lakh crore for fertilizer subsidies.

Also read: Millions of drones to be deployed in villages to spray fertilizers