India’s dual dependence on West Asia for urea production, Pg7

Key Highlights:

• The West Asia conflict is disrupting global trade, potentially affecting India's LNG supply and urea production.
• India imports over 50% of its natural gas, with over 40% coming from Qatar, which passes through the Strait of Hormuz.
• In FY26, about 30% of India’s LNG supply was used for the production of fertilizers.
• India's urea consumption reached 387 lakh metric tonnes in 2025, with imports exceeding 2,300 lakh metric tonnes, 71% of which came from West Asia.
• The Government of India issued the Natural Gas (Supply Regulation) Order, 2026, prioritizing the fertilizer sector.

Detailed Insights:

• The conflict impacts India's urea plants, which are running at half capacity due to disruptions in LNG cargoes.
• India is the fourth largest buyer of natural gas globally, importing 261 lakh metric tonnes in 2025, making it vulnerable to global shocks.
• More than 60% of India’s imported LNG could be affected by the closure of the Strait of Hormuz, a critical chokepoint in the Iran-Israel conflict.
• Urea production is energy-intensive, with many plants switching to natural gas for fewer emissions.
• India's urea reserves reached 61.51 lakh metric tonnes as of March 10, ahead of the Kharif sowing season.

Key Concepts Involved:

• LNG (Liquefied Natural Gas): Natural gas converted to liquid form for ease of storage and transportation.
• Urea: A nitrogen-rich compound used as a fertilizer in agriculture.
• Force Majeure: A clause in contracts that frees parties from liability due to extraordinary events.

India's Urea Security