India is preparing to set up its first urea manufacturing plant in Russia to ensure a stable fertiliser supply and reduce exposure to volatile global markets, according to reports in The Economic Times. The initiative, led by Rashtriya Chemicals and Fertilisers (RCF), National Fertilisers Ltd (NFL), and Indian Potash Ltd (IPL), seeks to utilise Russia’s rich reserves of natural gas and ammonia, raw materials that India currently lacks in adequate quantity.
Officials familiar with the talks said the plan could be formally announced during Russian President Vladimir Putin’s visit to India in December, underscoring a new phase in India–Russia economic cooperation. The project aims to produce over two million tonnes of urea annually, offering a long-term buffer against supply disruptions and price shocks.
Early Progress and Industry Collaboration
RCF, NFL, and IPL have already signed non-disclosure agreements (NDAs) with Russian partners to start groundwork for the project. Negotiations are focusing on land allocation, raw material pricing, and transport logistics, sources told Economic Times. “We are seeing sincerity and alignment on both sides,” one official noted, suggesting that talks are progressing steadily.
While the companies have not yet issued official statements, industry analysts see the plan as a strategic diversification move to secure access to essential feedstocks amid rising global instability.
Fertiliser Crunch Exposed Supply Risks
India’s decision follows the fertiliser shortage during the 2025 kharif season, when China restricted urea exports, causing prices to spike and straining the government’s subsidy budget. Despite record domestic output, India had to import large volumes at higher rates to meet farm demand.
With monsoon rains boosting cultivation of nutrient-intensive crops such as maize and another strong rabi season ahead, fertiliser demand continues to climb. Establishing a production base in Russia will help stabilise supply and reduce India’s reliance on imports from volatile markets.
Domestic Capacity Expanding, But Raw Material Gaps Persist
India’s domestic urea output reached a record 31.4 million tonnes in FY24, supported by six new plants commissioned by HURL, Chambal Fertilisers, Matix Fertilisers, and RFCL. The cabinet has also cleared a new ₹10,601 crore urea plant in Assam to strengthen capacity in the east.
However, India remains dependent on imported natural gas and ammonia, which exposes it to global price fluctuations. Setting up a plant in Russia, therefore, represents not just an industrial investment but a strategic step toward fertiliser self-sufficiency.
India is the world’s second-largest consumer and third-largest producer of fertilisers. Yet, its vulnerability to raw material shortages has been a recurring challenge. The proposed Russia venture is expected to provide supply security, price stability, and a stronger foundation for India’s agricultural resilience amid shifting global dynamics.
