In a move aimed at ensuring a stable supply and controlled pricing of urea, a critical agricultural input, the Indian government has extended the permission for India Potash Ltd. (IPL) to import urea until March 31, 2026. This decision, announced by the Directorate General of Foreign Trade (DGFT) on Tuesday, prolongs IPL’s status as a State Trading Enterprise (STE) for urea imports on government account.

India's urea imports for the April-December period of the financial year 2025 (FY25) amounted to $1.8 billion, with Oman and Russia being major suppliers, contributing $829 million and $272 million respectively. Despite efforts to strengthen domestic fertilizer production through the revival of older plants and the establishment of new facilities, the country still necessitates substantial urea imports.

The government's decision to extend IPL's import mandate is a strategic measure to maintain control over the supply chain. By designating IPL, along with other public sector undertakings like Rashtriya Chemicals and Fertilizers (RCF) and National Fertilizers Limited (NFL), as authorized importers, the government ensures that urea imports are managed under its supervision.

Government data reveals a complex picture of India's fertilizer landscape. Urea sales in FY25 saw a 6.4% increase, reaching 300.26 lakh tonnes by December 31, 2024, compared to 282.08 lakh tonnes in the same period the previous year. However, urea imports during the first nine months of FY25 declined by 28.9%, standing at 43.16 lakh tonnes, down from 60.71 lakh tonnes in the previous year. This reflects a broader trend of reduced overall fertilizer imports, which fell by 18.4% to 120.54 lakh tonnes between April and December.

Domestic fertilizer production, on the other hand, saw a modest increase of 1.6%, reaching 391.62 lakh tonnes. This included 232.02 lakh tonnes of urea, a slight decrease from the previous year’s 237.09 lakh tonnes. The government’s subsidy allocation for food and fertilizers in 2025-26 has been set at ?3.71 lakh crore, a marginal increase of 0.70% over the current fiscal estimate. While the food subsidy allocation has seen a slight increase, the fertilizer subsidy allocation has been reduced to ?1.67 lakh crore, compared to the revised estimate of ?1.71 lakh crore for 2024-25.

The extension of IPL's import permission until March 2026 reaffirms the government's commitment to ensuring food security and supporting the agricultural sector. By maintaining a steady supply of urea and controlling its price, the government aims to mitigate the impact of global market fluctuations on Indian farmers and ensure the continued growth of the agricultural economy.