Expansion in Domestic Capacity in Indian Potash And Phosphate Trade

Introduction

India remains heavily reliant on imported potash (MOP) and phosphate fertilizers (DAP, phosphoric acid, and rock phosphate), making trade dynamics a critical part of the agri-input landscape. India imported 56.71 Lakh Metric Ton (LMT) DAP in 2023-24 and more than 4.2 million metric tons of MOP. This reliance exposes the sector to global supply shocks, currency volatility, and shifting geopolitical equations.

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Rising Import Bills

India spent over USD 8.29 billion on fertilizer imports in FY 2024–25, with potash and phosphate products forming a major share of the market. Although prices eased in 2023, volatility remains high due to OPEC+ energy policies and tightening supplies from key exporters like Morocco and Jordan.

Key Supplier Countries

Morocco, Jordan, Saudi Arabia, and Russia dominate phosphate supply to India, while Canada, Belarus, and Russia remain the top potash exporters. In July 2025, India signed a five-year agreement with Morocco’s OCP Group for long-term phosphate supplies. Similarly, Indian companies have been negotiating contracts with Canada’s Nutrien for potash security. These partnerships aim to shield Indian buyers from spot market fluctuations.

Table of Contents

1. Market Scope: Potash & Phosphate Imports in India
2. Import Trends and Volumes
3. Rising Import Bills and Price Volatility
4. Key Supplier Countries and Trade Agreements
5. Government Overseas Asset Investments
6. Domestic Capacity Expansion in Intermediates
7. Geopolitical Risks and Currency Impacts
8. Logistics, Port Handling, and Storage Infrastructure
9. Strategies for Reducing Import Dependence
10. Market Outlook Through 2035

Government Strategy to Reduce Dependency

The Indian government is actively working to secure raw material assets overseas. Public-sector companies like RCF and NFL have equity stakes in foreign mines, including joint ventures in Jordan and Tunisia. Furthermore, India is promoting direct application of rock phosphate (DARPs) in certain states to reduce imports of finished products. Additionally, subsidy rationalization policies encourage blending imports with domestically produced complexes.

Domestic Capacity Additions

To reduce reliance, India is expanding domestic phosphoric acid and complex fertilizer plants. For example, Coromandel International’s new sulfuric acid plant is projected to reduce import needs for intermediate raw materials. Similarly, Paradeep Phosphates is scaling production capacity after its acquisition of Zuari Maroc Phosphates. These investments aim to gradually substitute finished imports with locally produced value-added fertilizers.

Trade Risks and Geopolitics

Global trade disruptions directly affect India’s fertilizer supply. The Belarus sanctions in 2022 reduce potash flows, while Russia’s supply chain volatility created temporary shortages. Currency depreciation also raised landed costs for importers.

Logistics and Port Infrastructure

Major ports like Kandla, Mundra, Vizag, and Paradip handle bulk fertilizer imports. However, port congestion and limited bulk handling capacity have raised demurrage costs. The government is pushing for dedicated fertilizer berths and storage facilities, which could reduce logistics costs over the next decade.

Long-Term Outlook

India’s dependence on imports is unlikely to disappear completely, given limited reserves of phosphate and potash. However, supply chain diversification, domestic production of intermediates, and policy support are expected to reduce vulnerability by 2035. Companies that secure long-term contracts and invest in local backward integration will be better positioned against global price swings.

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