Coromandel International, Chambal Fertilizers and Indian Potash Ltd have signed a pact with Canada-based Canpotex for the import of 15 lakh tonnes of potash annually for three years, according to the Ministry of Chemicals and Fertilizers.
Canpotex, Canada is amongst the largest suppliers of Potash globally, exporting around 130 lakh tonnes of product annually.
Potash, which is a source of potassium, is used both for direct application as MOP (Muriate of Potash) as well as in combination with 'N' & 'P' nutrients in NPK fertilizers.
India meets 100 per cent of its potash requirement through imports. The country imports approximately 40 lakh tonnes of MOP annually.
The Memorandum of Understanding (MoU) was presented to Chemicals and Fertilizers Minister Mansukh Mandaviya on Wednesday, an official statement said.
"In a significant step towards ensuring long-term fertilizer availability for the farming community, India's fertilizer companies - Coromandel International, Chambal Fertilizers and Indian Potash Ltd signed a MoU with Canpotex, Canada on Tuesday," it added.
Mandaviya hailed the signing of long-term agreements between the companies for supply of MOP to the Indian farmers.
"As part of the MoU, Canpotex, Canada will supply up to 15 lakh tonnes of potash annually for a period of 3 years to the Indian fertilizer companies. This supply partnership is expected to improve the fertilizer availability within the country and reduce supply side and price vulnerabilities," the minister said.
The MOU will reduce both supply and price volatility and ensure stable long-term supply of potassic fertilizer to India, the minister added.
Mandaviya said the Centre has been encouraging the domestic fertilizer industry for establishing supply linkages through long-term partnerships with resource rich nations.
"Given India's high dependence on imports of raw material and fertilizer minerals, these partnerships provide secured availability of fertilizers and raw materials over a period of time and also offer price stability in volatile market conditions," Mandaviya said.
He said this will improve the availability of MOP for the farming community, uphold their welfare and contribute towards ensuring food security in the country.
Mandaviya highlighted that the government is working towards long-term MOUs for potash and other fertilizers with countries like Russia and Israel among others.
To reduce import dependence, the department of fertilizer has included PDM (Potash Derived from Molasses) in the Nutrient Based Subsidy Scheme (NBS) to support indigenous sources of potash.