The India fertilizers market is projected to register a CAGR of 11.9% during the forecast period (2021-2026). The impact of global pandemic Covid-19, on the Indian fertilizer market, is low, as the national government exempted this sector from lockdown restrictions. But the sector faced challenges in terms of shortage of labor and raw materials due to lockdown. The government of India took measures to ensure fertilizers are available to the farmers in the midst of lockdown which resulted in the increased sales of fertilizers. India is the second-largest consumer of fertilizers in the world with an annual consumption of more than 55.0 million metric tons. Among the various type of fertilizers used in India, Urea is one of the highest consumed fertilizers in the country as a source of Nitrogen. The consumption of Urea in the country as of March 2018 was 29.0 million metric ton. DAP is the second majorly consumed fertilizer in the country. According to the Department of Fertilizers, the total production of Urea in India was 20.7 million metric ton in 2017 and DAP was 14.6 million metric tons in 2017, which was 1.36% higher compared to 2016.
Key Market Trends
Increasing Agriculture Production
According to the Department of Agriculture, Cooperation & Farmers Welfare, agriculture production in the country has increased despite the decreasing area under cultivation. The production of rice has reached 116.5 million metric ton in 2019 and wheat production has reached 103.6 million metric ton from 112.5 million metric ton of rice and 99.9 million metric ton of wheat in 2018. Various Initiatives of Government of India, such as Initiative for pulses by providing subsidy fo quality seeds produced, cluster frontline demonstrations through KVKs and so on are also being undertaken under National Food Securit Mission (NFSM) for increasing the production and productivity of pulses in the country.
Increase in production of DAP and Complex Fertilizers
Urea is the major consumed fertilizer in India followed by DAP. According to the Department of fertilizer of India, the production of DAP and Complex fertilizers is increasing in the country. The production of DAP reached 3.9 million metric ton and the production of complex fertilizers reached 9.0 million metric ton in 2019. The increase in production has resulted in the decline of DAP imports by 26.0% in 2019. The production of DAP has increased in the period of 2017-2018 when the global prices for phosphate raw materials fell. This boosted the production of DAP in the country owing to the higher demand for fertilizer.
The India Fertilizer Market is a consolidated market with major players such as Coromandel International Limited, Indian Farmers Fertilizer Cooperative (IFFCO), Fertilizers and Chemicals Travancore (FACT), Deepak Fertilizers Limited and Chambal Fertilizers Limited, among others. The market is fragmented with a mix of government-owned and co-operatives garnering a high market share in the straight and complex fertilizer space and private companies engaged in a high degree of product innovation to tap the non-subsidy space.
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