India: Facing potential disruptions in fertilizer production due to a gas shortage caused by the ongoing Middle East conflict, India has asked China to allow the sale of select urea cargoes. The request comes as U.S.-Israeli attacks in Iran have hindered liquefied natural gas (LNG) supplies, a critical feedstock for fertilizer plants, forcing some Indian producers to scale back operations.
Indian officials have approached their Chinese counterparts to consider easing export restrictions, according to sources familiar with the discussions. No final decision has yet been made. China, the world’s largest urea producer, controls exports under a quota system and has not allocated any shipments for 2026. Last year, some urea shipments were permitted to India.
Global urea prices surged 21% to a three-year high in the first week of the conflict, highlighting the pressure on food and fertilizer markets. India, the world’s largest urea importer, has so far received 9.8 million tons in the current fiscal year, with another 1.7 million tons scheduled to arrive by June, the peak period for fertilizer use ahead of the monsoon.
Although India currently faces no immediate shortage, prolonged gas supply disruptions could force the nation to secure additional imports from countries including China, Russia, Indonesia, Malaysia, and Egypt. The government is expected to issue a new urea import tender by late March or early April.
India’s move coincides with easing investment rules for neighboring countries, particularly China, signaling efforts to strengthen economic ties despite geopolitical rivalry. Fertilizer makers, ranked second in gas allocation priority after power plants, are currently receiving roughly 70% of their fuel needs, with some plants already cutting production due to the shortfall.
The request underscores India’s proactive steps to maintain energy and food security amid global supply chain uncertainties caused by geopolitical tensions.