Indian fertilizer firms sign pacts for yearly import of 3.1 mn MT of DAP from Saudi

By | July 14, 2025
Indian farmers using DAP fertilizer in wheat field after Saudi Arabia import deal

In a significant development for India’s agricultural sector, three major Indian fertilizer firms—Indian Potash Limited (IPL), KRIBHCO, and Coromandel International—have signed long-term agreements with Saudi Arabia’s mining giant Ma’aden for the annual import of 3.1 million metric tonnes (MT) of Diammonium Phosphate (DAP). This strategic move is expected to bolster India’s fertilizer security and reduce dependency on unpredictable global supply chains.

A Long-Term Vision for Fertilizer Security

The landmark agreements were signed during Union Chemicals and Fertilizers Minister J.P. Nadda’s visit to Saudi Arabia from July 11 to July 13, 2025. The deals are valid for an initial period of five years, with a provision for a five-year extension, offering long-term stability and predictability in India’s phosphate fertilizer imports.

DAP is one of the most widely used phosphate fertilizers in India, essential for enhancing crop productivity. With this agreement, India is set to increase its annual DAP imports from Saudi Arabia by over 60%, from 1.9 million tonnes in 2024–25 to 3.1 million tonnes starting 2025–26.

Why This Deal Matters

1. Stabilizing Supply Amid Global Uncertainty

Over the past few years, India has faced rising challenges in securing consistent fertilizer supplies, particularly after China restricted DAP exports due to its domestic demands. These restrictions led to tighter global supplies and soaring prices, putting stress on Indian importers and, by extension, Indian farmers.

Saudi Arabia, with its abundant phosphate reserves and state-owned fertilizer producers, has emerged as a reliable and strategic partner. This deal ensures a stable and diversified supply of DAP, insulating Indian agriculture from sudden market shocks and disruptions.

2. Reducing Import-Related Volatility

India currently imports over 60% of its phosphate fertilizer requirements, making it highly vulnerable to international price fluctuations. As of June 2025, DAP prices had shot up to USD 810 per tonne, while domestic stocks had dropped to 12.4 lakh tonnes, down from 21.6 lakh tonnes the previous year. The new agreement is expected to ease the pricing pressure and enhance inventory levels.

3. Strengthening Bilateral Ties with Saudi Arabia

This development is also a diplomatic milestone, reflecting growing strategic and economic ties between India and Saudi Arabia. Minister J.P. Nadda met with Saudi ministers and officials to discuss deeper cooperation in the fertilizer sector, including joint research, investments, and supply-chain resilience.

A Joint Working Group, co-led by India’s Fertilizer Secretary and Saudi Arabia’s Vice-Minister for Mining Affairs, has been established to oversee progress, address operational hurdles, and explore new areas of collaboration.

Beyond DAP: A Comprehensive Fertilizer Partnership

While DAP remains the core focus of the agreement, discussions also included expanding cooperation in other fertilizer segments such as:

  • Urea
  • NPKs (Nitrogen, Phosphorus, Potassium fertilizers)
  • Customized crop-specific fertilizers for Indian conditions
  • Joint ventures in fertilizer production and mining

This broader framework aims to make India not just a buyer but a strategic partner in Saudi Arabia’s expanding fertilizer industry.

What It Means for Indian Farmers

For Indian farmers, the agreement offers a direct benefit in the form of uninterrupted availability of DAP at stable prices, especially ahead of critical sowing seasons like Kharif and Rabi. The assurance of long-term supply will help the government plan subsidies more effectively and avoid last-minute procurement struggles that often lead to shortages or price spikes.

Moreover, the government is expected to pass on the cost benefits of long-term contracts to end-users, ensuring affordable fertilizer pricing at the retail level.

Domestic Fertilizer Industry Reaction

Indian fertilizer industry insiders have welcomed the deal as a game-changer. According to a senior official from KRIBHCO, “This partnership brings predictability to our procurement plans and helps us serve the farming community better. It’s a step toward achieving Atmanirbhar Bharat in terms of fertilizer access.”

Coromandel International, which has also signed the agreement, plans to integrate the imports into its Pan-India distribution network, especially targeting high-phosphate-need regions in central and western India.

Government’s Broader Fertilizer Policy Push

This agreement also aligns with the Indian government’s larger policy goals, which include:

  • Securing global supply chains
  • Attracting foreign investment in Indian fertilizer ventures
  • Reducing subsidy burdens through predictable import pricing
  • Supporting soil health through balanced fertilizer use

In addition, the collaboration may lead to R&D initiatives focused on region-specific formulations that cater to India’s diverse agro-climatic zones.

Looking Ahead: A Strategic Win

As the world faces increasing geopolitical and climate-related disruptions, securing critical inputs like fertilizers becomes a national priority. The India–Saudi Arabia DAP agreement represents more than just a trade deal—it’s a strategic alliance that strengthens India’s food security, empowers its farmers, and builds long-term diplomatic capital.

With the framework now in place, stakeholders from both countries are optimistic about deepening the relationship further—potentially expanding into areas like green ammonia, mineral exploration, and renewable-powered fertilizer plants.