Summary of this article
Farmers in Punjab and Haryana have started stocking fertiliser and diesel weeks before the Kharif season in June, fearing shortages and price spikes as the US-Israel war on Iran disrupts Gulf supply routes, especially through the Strait of Hormuz.
FPOs and farmers say shortages are already visible on the ground, with urea and DAP stocks failing to reach villages and producer groups, raising fears of black-market sales, inflated prices and diversion of subsidised stock.
India’s heavy dependence on fertiliser and feedstock imports from the Gulf has turned the West Asia conflict into an immediate agricultural risk, prompting the Centre to raise subsidy support while concerns remain over long-term supply stability.
In Punjab’s Moga district, Devendra Singh has already begun doing something he usually waits weeks to do.
The farmer who owns the 25-acre land has started buying and storing fertiliser and diesel ahead of the Kharif sowing season, worried that a war unfolding thousands of kilometres away could soon impact him.
“I have kept a little so that there is no problem later,” he said.
The apprehension, he says, is real even before the sowing cycle begins.
As the US-Israel war on Iran deepens and tensions continue to disrupt the Strait of Hormuz, one of the world’s most critical energy and fertiliser shipping routes, anxiety and fear is quietly spreading across India’s farm belt.
From the paddy fields of Punjab to the grain-producing districts of Haryana, farmers and farmer producer organisations (FPOs) say the fear is no longer abstract.
The kharif sowing season is still weeks away, but farmers are already talking about stocking fertiliser in advance, worrying about diesel prices, and preparing for the possibility of shortages that could hit just as paddy transplantation begins in June.
The concern is rooted in India’s structural dependence on imported fertilisers and feedstock from the Gulf. More than 60 per cent of India’s imports of urea and diammonium phosphate (DAP), and nearly 80 per cent of ammonia and sulphur imports, are sourced from the Gulf region, making any disruption in West Asia immediately relevant to India’s agricultural economy.
That dependency is now becoming a vulnerability.
For farmers, the global conflict is already being translated into immediate, practical questions: Will urea arrive on time? Will DAP become expensive? And if diesel prices rise, what happens to the cost of running tractors and irrigation pumps?
Rohin Kumar, Programme Director at the Palakiya Foundation and Network Lead at Hands of Transition says that the present conflict must be seen in the context of a supply chain already weakened by earlier geopolitical shocks.
“The Russia-Ukraine war that began around 2022 disrupted the global fertiliser supply,” he said, adding that countries dependent on Russian and Belarusian supplies had since scrambled for alternatives in West Asia. This, he explained, pushed India, Brazil and several European buyers towards Gulf producers as their new primary source, thereby increasing India’s structural dependence on the region.
Shortage Has Already Begun
In different districts of North Indian states, the FPO representatives told Outlook that the problem is not merely speculative.
According to a member of Agrobusiness Krishi Producer Company Limited in Faridabad who did not wish to be named, both urea and DAP are already in short supply in the market.
“Even now, urea and DAP are not sufficiently available,” the member said. “If it is not being imported from there, rates automatically start increasing, and because of that there is a shortage in fertilisers.”
While the government continues to keep official prices of key fertilisers such as urea and DAP under subsidy and price control, farmers and FPOs say the real fear lies not in the notified rates, but in the physical availability of stock.
The memory of last year remains fresh.
As Kumar puts it, the June 2025 Israel-Iran 12-day conflict was a “dress rehearsal for the current crisis” as it temporarily spiked urea and DAP prices and tightened supply chains.
This year, farmers in the region fear a repeat.
Pawan, associated with Harkhet Farmers Producer Company Limited in Haryana, said shortages typically became visible at the village level just as sowing preparations intensified last year.
“That is when we need urea, DAP and other fertilisers the most,” he said. “If stock comes, it often gets diverted and is sold elsewhere.”
He also described the scale of the mismatch between demand and supply during the previous season.
“In my village alone, there are around 5,000 acres of land. According to that, the requirement was around 7,500 sacks of urea. But only around 3,000 bags came. The remaining 4,500 had to be arranged from outside at higher prices,” he told Outlook.
For many farmers, that gap meant scrambling for supply through private dealers, often at inflated rates.
The problem appears to extend beyond individual villages.
Gurjeet Singh, who runs a relatively new FPO in Punjab established in 2023, said that despite receiving all the required licences and securing supply tie-ups, the organisation has not received a single consignment of urea since August last year.
“Even till now, we have not received urea even once. Not even once,” said Singh.
The FPO, he said, has formal tie-ups with major companies including IFFCO, Chambal Fertilisers and Chemicals Ltd. and PI Industries, yet no stock has reached them.
Outlook reached out to IFFCO and Chambal Fertilisers and Chemicals Ltd but no response was received. The story will be updated as and when a response is received.
What troubles Singh most is the complete opacity in the supply chain.
“The companies say there is a shortage. Dealers and distributors say there is a shortage. Farmers say there is a shortage. So where is the urea? Where is the fertiliser? Where are the subsidised goods?”
For FPOs, which were created precisely to ensure direct and transparent supply to farmers, the failure is particularly stark.
“We have spent our own money, built a godown, arranged everything, and were told to directly supply fertiliser and DAP to our 300–400 members at lower rates and with transparency. But if it is simply not available, what can we do?”
When Shortages Spill Into The Black Market
The shortage, farmers say, rarely remains just a supply issue. Once sowing begins, it quickly mutates into a black-market problem.
During the 2025 disruption, DAP, officially priced at around ₹1,350 a bag, was reportedly sold for as much as ₹1,800 in the grey market.
This year, farmers, especially in Punjab and Haryana, fear a repeat.
“If it is coming, then it is being sold in the black market,” Pawan said, recalling last season’s experience when farmers had no option but to purchase from private dealers at higher prices.
He described how large dealers often corner stock first and then compel farmers to buy additional products they do not need.
“They attach some other item, and the farmer is forced to buy items that they do not even need — nano urea, plant growth promoters, liquid fertilisers,” he said.
This bundling effectively raises the cost of access.
In many cases, farmers are forced to buy one bottle of liquid fertiliser costing ₹300–400 along with every two bags of conventional fertiliser.
Such practices are especially difficult for smaller cultivators who already operate on thin margins.
Yet, even among FPOs, there is uncertainty over where exactly the leakage is happening.
Singh said that while black marketing is widely discussed among farmers and other producer groups, those on the ground often struggle to identify the exact point at which subsidised stock disappears.
“We hear a lot of things, but unless we ourselves verify it, we cannot say anything concrete,” he said. “It may be happening somewhere in between.”
That “somewhere in between” has become the central question for farmers.
“Even if it is being dispatched, it is not reaching here,” Singh said. “There is no transparency visible to us.”
The result is a vacuum in the supply chain: stock appears to be dispatched on paper, yet neither FPOs nor farmers see it at the last mile.
The consequences are already beginning to shape farming decisions.
Faced with recurring shortages, some farmers in Punjab, according to Singh, are beginning to shift away from conventional cultivation altogether.
“In our area, people are gradually moving towards organic farming,” Singh said. “Some are even moving towards plantation, eucalyptus and poplar, because they feel it is safer to plant once and manage one or two crops in between.”
Others, he added, have been reluctant to move to bio-fertilisers despite official encouragement.
“They say that if they shift, their yield will fall by 20 to 25 percent. That directly affects their earnings. And if income falls, who will compensate for that loss?”
For many farmers, this means repeated trips to dealers and distributors in the hope of securing stock.
“They keep running from one dealer to another,” Singh said.
India’s Fertiliser Dependence
India’s reliance on imported fertilisers has risen sharply.
In FY 2025–26, by January alone, urea imports had already reached 8.93 million tonnes, up over 85 per cent year-on-year, while DAP imports rose to 5.95 million tonnes.
Overall fertiliser imports are projected to touch $18 billion, a record high.
This dependence becomes particularly risky because much of this trade passes through the Strait of Hormuz.
The ongoing conflict has already pushed global urea prices sharply higher. Reuters reported that urea prices have risen by roughly $80 per tonne since the war began, forcing India to increase subsidy support and issue emergency import tenders.
Even domestic production is vulnerable.
According to NITI Aayog’s India Climate and Energy Dashboard, the fertiliser industry remains one of India’s most energy-intensive sectors, heavily dependent on natural gas.
In FY 2024, the sector consumed 21.05 billion cubic metres of natural gas, which accounted for around 65 per cent of total fuel use in fertiliser production.
This means any disruption in LNG imports, again linked to the Gulf route, can directly hit domestic urea output.
As Kumar, Program Director at the Palakiya Foundation, explained, domestic plants offer only limited relief.
“Fertilizer output in India is closely tied to LNG availability, and supply constraints have already reduced domestic urea production,” he said.
The Centre has moved to cushion the blow. The Union Cabinet last week approved a nutrient-based subsidy outlay of ₹41,533 crore for the kharif 2026 season, an 11.6 per cent increase over last year. The decision is intended to keep DAP and other phosphatic and potassic fertilisers affordable.
For India’s farm belt, the war may be distant in geography. Its consequences are already local.
Calling it a “relief measure”, Kumar said the move aligns with rising global input prices and stabilises farm-gate costs ahead of Kharif, while also underscoring the need for both short- and long-term measures despite buying some time.
