The global fertiliser sector confronts unprecedented disruption as recent US trade policy modifications fundamentally reshape international supply networks. Escalating geopolitical tensions compound these challenges, generating widespread uncertainty across agricultural markets and affecting farming communities worldwide through strained distribution channels. What used to be predictable supply chains are now anything but certain. The latest round of US tariffs is particularly concerning because it’s disrupting long-established trading relationships and forcing everyone to scramble for new arrangements. For a country like India, whose extensive agricultural economy relies substantially on fertiliser imports, these developments present significant challenges.
This article delves into the specifics of these US policies, their immediate and long-term implications for the international fertiliser trade, and, most importantly, their ramifications for India.
How US tariffs are shaking up fertiliser markets
On July 31, President Trump signed an executive order that’s already causing ripple effects across global fertiliser markets. The new “reciprocal” tariffs kicked in on August 7, and they’re hitting some countries much harder than others.
Egypt, Saudi Arabia and Morocco are now dealing with a 10 per cent tariff on their phosphate fertilisers, while Jordan and Israel got slapped with 15 per cent. This is a big deal, especially for Saudi Arabia, a major supplier of ammonium phosphate to the US. In the nitrogen world, granular urea from Algeria and Nigeria now faces tariffs of 30 per cent and 15 per cent, respectively. Not everyone was affected equally, however.
The tariff implementation reveals notable inconsistencies in application. Potassium fertilisers from USMCA nations such as Canada maintain tariff-free status, while other Canadian exports face substantial 35 per cent duties. Brazil successfully negotiated relief from an initially proposed 50 per cent tariff, securing exemptions for NPK products through diplomatic channels. As a direct result of these announcements, market prices for crucial fertilisers like monoammonium phosphate (MAP), diammonium phosphate (DAP), urea and ammonia all showed an instant increase on July 31. The whole situation shows just how quickly trade relationships can shift and leave everyone scrambling to adapt.
What it means for India
The fertiliser industry is experiencing massive growth. The global fertiliser market itself is projected to grow from around $402.5 billion in 2025 to $541.2 billion by 2030, which is roughly 6.1 per cent growth annually. This is driven by the need to feed a growing world population projected to exceed 9 billion by 2050, a decrease in available farmland and the increasing adoption of modern farming techniques.
For India’s agricultural sector, the backbone of its economy, this global situation creates some serious vulnerabilities. India relies heavily on imported fertilisers to sustain its massive crop production. A substantial majority of these imports come from Russia and Saudi Arabia, two countries that are now, directly or indirectly, affected by new US tariffs. This high dependence of import sources exposes India to a significant risk of price shocks and supply disruptions. Even though these tariffs don’t directly target India, the ripple effects are unavoidable. When fertiliser prices spike globally, India’s procurement expenses will climb, putting immense pressure on farmers which eventually will hurt their profits, raise food costs for consumers, potentially making Indian agricultural exports less competitive worldwide.
India’s strategic challenges and opportunities – way forward
The situation presents India with a set of distinct challenges and, if handled correctly, can provide the country with valuable opportunities. The immediate difficulties of the tariffs are evident- extensive dependence on suppliers now encountering fresh trade barriers, susceptibility to international price fluctuations and inadequate domestic production capabilities. India’s import statistics reveal this dependency starkly—approximately 20 per cent of urea, 50-60 per cent of DAP and nearly all Muriate of Potash requirements come from abroad.
However, these circumstances also present opportunities for comprehensive restructuring of policies. India can pursue import diversification by establishing supply partnerships across Southeast Asia, Africa and Latin America, reducing reliance on concentrated sources and building resilience against geopolitical disruptions. Current conditions favour accelerated domestic production development. Strategic research investments, private sector incentives and international collaborations could advance self-sufficiency goals significantly. India’s diplomatic channels can negotiate favourable trade arrangements and seek exemptions through various international forums.
Additionally, advancing sustainable agricultural practices through precision farming and nutrient-efficient fertiliser applications can enhance productivity while reducing overall consumption, thereby lessening long-term import dependencies.
Proactive market monitoring can enable strategic procurement timing, potentially leveraging surplus fertiliser as suppliers redirect volumes away from the United States. These coordinated approaches could transform present vulnerabilities into enduring competitive advantages, strengthening India’s agricultural foundation while reducing external dependencies that have historically constrained the sector’s growth potential.
Conclusion
The US tariff move represents a watershed moment for international fertiliser commerce. For India, it also emphasises the need to strengthen resilience—through diversification, self-sufficiency and smart diplomacy. By being forward-looking and acting swiftly, India can insulate itself against risks, stabilise input prices and position itself to gain from emerging trade alignments in a recalibrated world economy.
(The author is Founder Chairman – Tradelink International Pvt. Ltd)
Published on September 6, 2025
