This really challenges the self-sufficient narrative, feels more like we’re assembling dependence than reducing it. The gas and raw material angle makes the risk much more real than the headline numbers suggest. Hard to ignore how exposed the whole system is.
The “Made in India” reframe on urea was new to me.
But the piece underneath it is harder to write.
India is the world’s largest fertiliser buyer. Its seasonal spot tenders move global urea and DAP prices by $15-20 per tonne each cycle. Every exporter knows when India comes to market, how much it needs, and that the government subsidy back stop means price resistance is near zero. India negotiates like a buyer with no leverage, because structurally, it has none.
This isn’t just a government problem. India’s listed fertiliser companies, the ones with procurement professionals, balance sheets, and shareholder scrutiny, run the same playbook. No forward positions. No long-term offtakes built before the crisis. The strategy, such as it is, is to squeeze suppliers on the spot and pass the pain upstream to the subsidy. The five-year offtakes with Saudi Arabia and Morocco that should have existed in 2022 were signed in mid-2025, after DAP went from $515 to $810 per tonne and kharif opening stocks had already collapsed to a third of what they were two years prior.
The government is just the private sector’s procurement culture, but with a bigger cheque.
Russia-Ukraine ran up a ₹2.5 lakh crore subsidy bill in a single year. China quietly stopped DAP export clearances in early 2025. No announcement. Customs just stopped issuing permits. The response in both cases: issue more spot tenders.
India buys fertiliser the way a panicked retail investor buys stocks. Largest buyer in the world. Zero pricing power.
The subsidy is a symptom. The structural failure is that nobody, public or private, has ever been made accountable for procurement strategy. Because when the price spikes, the government pays. And when the government pays, nobody loses their job.
That’s the piece I’d want to read next.
Really interesting piece, Ashna. India needs to focus more on end-to-end supply chains and localising production across the value chain. This will involve infrastructure investments, as you referenced in your piece, but also a structural policy focus towards strengthening local production throughout.
I like that you’re willing to look straight at the hard question — the one most people prefer not to name. This kind of calling‑out sits at the centre of a real research mind, someone who clearly has more to say than what’s already on the page. What you’ve written feels like the opening paragraph of a policy problem statement, the kind that usually leads to a sharper, more uncomfortable second section.
And I can sense you’re holding that second section back. I want to hear it. If I were a portfolio manager, I’d be begging for a positional paper with an event‑based timeline, something I could actually anchor decisions to. Because the scenario you’ve outlined isn’t theoretical — it’s already throwing up shorting opportunities and structural stress points.
The timing is uncanny. This is exactly what I’ve been discussing with the people I’m working with. The ramifications aren’t abstract; they could turn catastrophic if the Hormuz situation drags on. The question now is what comes next — and what you see that the rest of us are still squinting at.
Great write up. Guess this is a story that plays out in most sectors.
Didn’t know how Made in India classification is made. Interesting!
Thank you!!
This really challenges the self-sufficient narrative, feels more like we’re assembling dependence than reducing it. The gas and raw material angle makes the risk much more real than the headline numbers suggest. Hard to ignore how exposed the whole system is.
Great Piece of work...
Well articulated, Ashna.
The “Made in India” reframe on urea was new to me.
But the piece underneath it is harder to write.
India is the world’s largest fertiliser buyer. Its seasonal spot tenders move global urea and DAP prices by $15-20 per tonne each cycle. Every exporter knows when India comes to market, how much it needs, and that the government subsidy back stop means price resistance is near zero. India negotiates like a buyer with no leverage, because structurally, it has none.
This isn’t just a government problem. India’s listed fertiliser companies, the ones with procurement professionals, balance sheets, and shareholder scrutiny, run the same playbook. No forward positions. No long-term offtakes built before the crisis. The strategy, such as it is, is to squeeze suppliers on the spot and pass the pain upstream to the subsidy. The five-year offtakes with Saudi Arabia and Morocco that should have existed in 2022 were signed in mid-2025, after DAP went from $515 to $810 per tonne and kharif opening stocks had already collapsed to a third of what they were two years prior.
The government is just the private sector’s procurement culture, but with a bigger cheque.
Russia-Ukraine ran up a ₹2.5 lakh crore subsidy bill in a single year. China quietly stopped DAP export clearances in early 2025. No announcement. Customs just stopped issuing permits. The response in both cases: issue more spot tenders.
India buys fertiliser the way a panicked retail investor buys stocks. Largest buyer in the world. Zero pricing power.
The subsidy is a symptom. The structural failure is that nobody, public or private, has ever been made accountable for procurement strategy. Because when the price spikes, the government pays. And when the government pays, nobody loses their job.
That’s the piece I’d want to read next.
Really interesting piece, Ashna. India needs to focus more on end-to-end supply chains and localising production across the value chain. This will involve infrastructure investments, as you referenced in your piece, but also a structural policy focus towards strengthening local production throughout.
Looks like a system optimised for efficiency, not robustness. Works until it doesn’t. Really enjoyed this.
Reading your article makes us a bit more cautious about the times to come
I like that you’re willing to look straight at the hard question — the one most people prefer not to name. This kind of calling‑out sits at the centre of a real research mind, someone who clearly has more to say than what’s already on the page. What you’ve written feels like the opening paragraph of a policy problem statement, the kind that usually leads to a sharper, more uncomfortable second section.
And I can sense you’re holding that second section back. I want to hear it. If I were a portfolio manager, I’d be begging for a positional paper with an event‑based timeline, something I could actually anchor decisions to. Because the scenario you’ve outlined isn’t theoretical — it’s already throwing up shorting opportunities and structural stress points.
The timing is uncanny. This is exactly what I’ve been discussing with the people I’m working with. The ramifications aren’t abstract; they could turn catastrophic if the Hormuz situation drags on. The question now is what comes next — and what you see that the rest of us are still squinting at.