The War in West Asia has brought in serious disruptions in natural gas supply resulting in fertiliser production cuts, import slide, price escalation, and widespread uncertainty, directly threatening agricultural stability. However, the roots of this crisis are not purely external; they also lie in the neo-liberal policy of import dependence over domestic resource utilisation and long-term self-reliance.

The production of ammonia and urea is highly natural gas-intensive, with natural gas contributing nearly 70–80 percent of the cost of urea production. India is able to meet only about half of its natural gas requirement domestically, while the remaining demand is fulfilled through imports in the form of LNG. The fertiliser sector itself consumes roughly 30–35 percent of the total natural gas supplied in the country. A substantial portion of these imports originates from West Asia, making the sector particularly vulnerable to geopolitical disruptions.

The USA–Israel aggression against Iran has disrupted LNG supply chains.  Production and import of fertiliser are severely impacted. Several plants have been compelled to operate at reduced capacity or undertake temporary shutdowns, highlighting the fragility of the production system in the face of external shocks. The estimated monthly production loss is approximately 800,000 tonnes of urea and an overall decline of 10–15 percent in fertiliser output.

Green Revolution, Food Self-Sufficiency and Role of Chemical Fertilisers

The Green Revolution in India was fundamentally supported by the intensive use of chemical fertilisers—especially nitrogen (N), phosphorus (P), and potassium (K)—alongside irrigation, high-yielding variety (HYV) seeds, and mechanisation. Fertilisers acted as a crucial productivity multiplier, enabling crops to achieve their full yield potential. In the early phase of the Green Revolution, one kilogram of fertiliser nutrients was estimated to generate an additional 10–15 kilograms of food grain.

Obviously, fertiliser consumption increased dramatically after the mid-1960s. From just 0.07 million tonnes in 1950–51, it rose to 0.78 million tonnes by 1965–66, reaching 5.5 million tonnes in 1980–81 and 12.5 million tonnes in 1990–91. This upward trend continued to 18.1 million tonnes in 2000–01 and approximately 32–33 million tonnes by 2022–23—an increase of more than 450 times since Independence. Consequently, foodgrain production increased from 51 million tonnes in 1950–51 to 72 million tonnes in 1965–66, rising sharply to 130 million tonnes by 1980–81 and 176 million tonnes in 1990–91. It further reached 197 million tonnes in 2000–01 and about 330 million tonnes in 2022–23—more than six times the initial level. Fertilisers also drove major productivity gains. Wheat yields increased from around 850 kg per hectare in the 1960s to about 3,500 kg per hectare, while rice yields rose from nearly 1,000 kg per hectare to around 2,700 kg per hectare—reflecting a three- to four-fold increase and a transition to intensive agriculture.

Role of Public Sector

After Independence, and particularly as a prelude to the Green Revolution, the country witnessed massive growth of public sector fertiliser plants with healthy regional spread. The public sector fertiliser industry played a pivotal role in massive acceleration of food production in India. Major PSU entities like FCIL, HFCL, NFL, RCF and PDIL were the dominant contributors. The contributions of the PSUs in the Green Revolution in India are inerasable from the pages of the history of the forward journey of agriculture in India.

Shocking Consequence of Dismantling of Fertiliser PSUs

Fertiliser PSUs were the worst victims of the attack of privatisation under the neo-liberal policy regimes since 1991. The government announced a suicidal policy shift aggressively aligned to excessive import dependence. It is exactly during this period that fertiliser PSUs were shut down under different pretexts. The closures sharply increased India’s dependence on fertiliser imports. Contrary to expectations, global prices surged, significantly raising subsidy burdens and foreign exchange outflow. Import dependence became structural, while promised private investments failed to materialise. Rising input costs and unreliable availability of fertilisers have worsened farmers’ conditions. With declining returns and growing distress, agriculture faces a serious crisis, posing risks to national food security. Ensuring domestic fertiliser availability has therefore become critical.

Growing Demand and Rising Import Dependence

India’s fertiliser consumption has risen to 60–65 million tonnes annually, underscoring the country’s food security needs. While domestic urea production has expanded to about 30.6 million tonnes, meeting most of the 35–36 million tonnes demand, reliance on imports persists at 15–25%. The imbalance is sharper in phosphatic and potassic fertilisers: DAP production of 4.5–5.0 million tonnes meets less than half of the 10–12 million tonnes demand, leaving 50–60% import dependence; MOP demand of 4–5 million tonnes is entirely import-driven. Overall, India produces 50–55 million tonnes of fertilisers against consumption of 60–65 million tonnes, with imports covering 20–25%. This situation underscores a deep structural imbalance in India’s fertiliser sector. Such reliance becomes particularly precarious during periods of geopolitical instability, which can disrupt supply chains and sharply impact availability and pricing.

Dependence on Natural Gas Demands Diversification to Coal Gasification

The growing mismatch between domestic production and consumption, combined with heavy reliance on imported fertilisers and raw materials, has exposed the sector to global market volatility and geopolitical uncertainties. This vulnerability is further intensified by the overwhelming dependence on natural gas as the primary feedstock for urea production, with its availability and pricing largely dictated by international markets.

Diversified and self-reliant feedstock strategy is urgent imperative. Coal gasification, leveraging India’s abundant coal reserves, presents a viable pathway for producing synthesis gas essential for ammonia and urea. In parallel, accelerated development of Coal Bed Methane (CBM) and other indigenous gas resources can reduce import dependence. Expanding domestic production capacity, securing raw material assets abroad, and advancing alternative technological routes must be treated as strategic priorities.

However, this imperative must be viewed against a critical policy lapse. India’s early initiatives in coal gasification—particularly at FCI’s Ramagundam and Talcher fertiliser plants in the mid-1970s—reflected a forward-looking attempt to utilise domestic coal for fertiliser production. While these plants faced operational and managerial constraints, there is little to suggest that gasification technology itself was inherently flawed.

The post-1991 policy framework further deprioritised public sector-led technological advancement. The closure of the Ramagundam and Talcher coal-based fertiliser plants was a blow to a strategically significant indigenous technological pathway. A more balanced approach, combining gas-based expansion with sustained development of coal-based technologies, would have better aligned with India’s resource endowment and long-term energy security needs.

China Global Leader in Coal-based Ammonia & Methanol Production

Despite a later start, China has emerged as a global leader in coal-based ammonia and methanol production through sustained state support, continuous R&D investment, and large-scale standardisation of gasification technologies. China provides a compelling example, producing 60–70 percent of its ammonia and over 80 percent of its methanol through coal-based routes, supported by large-scale integrated coal-to-chemicals complexes that ensure feedstock security. In contrast, India, despite possessing over 360 billion tonnes of coal reserves, continues to rely heavily on imported LNG for fertiliser production, revealing a disconnect between resource availability and industrial strategy.

Although India has announced an ambitious target of achieving 100 million tonnes of coal gasification by 2030, progress has been slow and uneven. Only a limited number of projects, such as the Talcher initiative, have been initiated, and these are plagued by delays, cost overruns, and weak execution. Concerns about the higher initial capital cost of coal gasification have further slowed adoption. However, this perspective overlooks the long-term advantages of coal, including supply stability and cost predictability, especially when compared to the extreme price volatility associated with LNG. The continued preference for LNG-based production reflects a short-term approach rather than a coherent long-term strategy. This contradiction is further underscored by the broader emphasis on self-reliance, which remains unfulfilled in the fertiliser sector due to the underdevelopment of indigenous alternatives.

Conclusion

The Russia–Ukraine conflict and now the US-Israel war on Iran has bitterly exposed the Himalayan mistake committed by the neo-liberal regimes in shutting down the public sector fertiliser plants in the country; the suicidal dependence on import of fertiliser and the neglect of developing coal-based fertiliser plants in the country.

The disruption in natural gas supply has revealed deep faults in India’s fertiliser policy. Excessive reliance on imported LNG, neglect of domestic resources, erosion of public sector capacity, and captivity under market mechanisms have been proved wrong.  Equally important is the failure to develop coal gasification despite India’s abundant coal reserves and the proven global success of this technology. Unless decisive measures are taken to reduce import dependence, strengthen domestic production, and develop alternative feedstock such as coal gasification, the sector will remain vulnerable to external shocks, with serious implications for agricultural sustainability and economic stability.