India has moved to buy a record 2.5 million metric tons of urea in a single tender, paying nearly double the price it did two months ago amid the conflict in West Asia. The purchase, which amounts to roughly a quarter of the country’s expected annual imports, is expected to tighten global supply and push international prices higher.
Deal details and prices
Indian Potash Ltd (IPL) agreed to buy 1.5 million tonnes of urea at USD 935 per tonne for west-coast delivery and a further 1 million tonnes at USD 959 per tonne for east-coast delivery. The tender sought a total of 2.5 million tonnes, about a quarter of India’s roughly 10 million-tonne annual import requirement for 2025.
Bidding and price jump
Reuters reported the tender drew offers to supply 5.6 million tonnes in total, though only a small share matched the USD 935 price. Most bids clustered near USD 1,000 per tonne and rose as high as USD 1,136. That is a sharp increase from a recent tender by Rashtriya Chemicals and Fertilisers, where bids were just over USD 500 per tonne.
Market impact
As the world’s largest urea importer, India’s large-scale buying could limit availability for other buyers, industry sources say, since producers have allocated much of their output to fulfill the tender. Observers warn that the scale of these purchases, combined with supply disruptions linked to the Gulf conflict, may keep global fertiliser markets tight.
Government response and stocks
The government has said sufficient fertiliser stocks are available and that it is taking steps to ensure supplies for farmers during the kharif season (June to October). On March 10 it placed the fertiliser sector on a priority list for gas allocation, directing that plants receive at least 70 percent of their average natural gas consumption over the previous six months.
Stock and production context
Ahead of kharif, India’s total fertiliser reserves were reported at 18 million metric tonnes, compared with 13 million metric tonnes in 2025. Urea stocks were around 6 million tonnes as of March 10, up from roughly 5 million tonnes a year earlier. Over the past decade India has expanded domestic urea capacity from about 20.8 million tonnes per annum in 2014-15 to 28 million tonnes per annum in 2023-24, but production remains heavily dependent on natural gas, much of it imported.
Outlook
The record procurement is likely to sustain upward pressure on prices and reduce near-term export availability for other buyers, even as New Delhi seeks to protect domestic supplies for the planting season.
