India Fertilizer Market 2025–2033: Driving Growth Through Sustainability and Innovation

According to Renub Research Latest Report Indian fertilizer market is poised for significant growth over the coming decade. Expected to expand from US$ 43.54 billion in 2024 to US$ 74.06 billion by 2033, the sector will record a CAGR of 6.08% during 2025–2033. This growth is fueled by factors such as rising agricultural productivity, government support, and increasing demand for staple crops like wheat, rice, and vegetables. Additionally, a growing focus on sustainable agriculture, including bio-fertilizers and balanced nutrient management, is reshaping the market landscape.

Overview of the Indian Fertilizer Industry

Fertilizers are substances, either chemical or natural, added to soil to enhance fertility and stimulate plant growth. They supply essential nutrients such as nitrogen (N), phosphorus (P), and potassium (K), along with secondary and micronutrients necessary for healthy crop development.

In India, fertilizers play a critical role in agricultural productivity, particularly for crops like rice, wheat, sugarcane, and vegetables. They not only improve crop yields and quality but also help correct soil nutrient deficiencies. The Indian government provides substantial subsidies on fertilizers to make them affordable for farmers, safeguarding both food security and the agrarian economy.

However, with these benefits comes a growing attention to sustainable fertilizer use, as over-reliance on chemical fertilizers can cause soil degradation and environmental damage. The market is increasingly witnessing a shift towards eco-friendly practices, including the adoption of bio-fertilizers and nutrient-balanced fertilization techniques.

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Growth Drivers in the Indian Fertilizer Market

Government Subsidies and Support

Government subsidies remain a key growth driver in India’s fertilizer industry. Fertilizers such as urea, DAP, and NPK are heavily subsidized, reducing costs for farmers and encouraging consistent usage. Programs such as the Nutrient-Based Subsidy (NBS) scheme allow fertilizer companies to set MRP based on market conditions, with the government monitoring to ensure fair pricing.

Additionally, initiatives like the PM Programme for Restoration, Awareness Generation, Nourishment, and Amelioration of Mother-Earth (PM-PRANAM), launched in June 2023, promote sustainable fertilizer application and organic farming. Under this program, states can receive 50% of the subsidy saved by reducing chemical fertilizer consumption compared to the previous three years, incentivizing efficient nutrient management.

Rising Agricultural Demand and Productivity Needs

India’s growing population and changing dietary habits are increasing demand for food grains, fruits, and vegetables, thereby driving fertilizer usage. Fertilizers are essential to support high-yield crops and maintain soil fertility, particularly in high-production states like Punjab, Uttar Pradesh, and Maharashtra.

With India’s population projected to reach 1.5 billion by 2030 and 1.7 billion by 2064, agricultural productivity becomes vital for national food security. Fertilizers play a pivotal role in meeting these demands, ensuring that the country can sustain a growing consumer base.

Growing Awareness of Sustainable Agriculture

Increasing awareness of environmental impacts of chemical fertilizers is prompting a shift toward bio-fertilizers and organic farming. Farmers are adopting eco-friendly practices to reduce soil degradation and enhance long-term fertility. Government programs also encourage balanced fertilization, promoting a combination of chemical, organic, and natural alternatives, which supports sustainable agricultural growth while maintaining soil health.

Challenges in the Indian Fertilizer Market

Excessive Use of Chemical Fertilizers

One of the primary challenges is the overuse of chemical fertilizers, which can cause soil degradation, reduced organic matter, and water contamination. Continuous reliance on nitrogen, phosphorus, and potassium-based fertilizers may reduce soil fertility over time, necessitating more external inputs. The government emphasizes balanced fertilization and bio-fertilizer adoption to restore soil health and support sustainable practices.

Rising Prices and Availability Issues

Despite subsidies, fertilizer costs have risen due to global raw material price increases and logistical challenges. Supply chain inefficiencies, particularly in remote areas, can disrupt fertilizer availability during peak seasons, affecting crop yields. Addressing these challenges remains crucial to ensuring food security and productivity.

Key Segments of the Indian Fertilizer Market

Indian DAP Fertilizers Market

Di-Ammonium Phosphate (DAP) is crucial for phosphorus supply, supporting root development and crop maturity. India relies heavily on imports to meet DAP demand, particularly during the Rabi season, making the market vulnerable to global price fluctuations. Major consumers include Punjab, Haryana, and Uttar Pradesh, with government subsidies ensuring affordability.

Indian MOP Fertilizers Market

Muriate of Potash (MOP) fulfills potassium requirements for crops like sugarcane, cotton, and fruits, enhancing water retention, disease resistance, and yield. With no natural potash reserves, India relies entirely on imports from countries like Canada and Belarus. The market benefits from subsidies but faces global supply volatility, with high consumption in Maharashtra, Karnataka, and Tamil Nadu.

Indian Urea Fertilizers Market

Urea remains the largest segment in India due to its high nitrogen content and critical role in boosting crop yield. Government subsidies make it cost-effective, ensuring widespread adoption across diverse crops. Its simplicity and compatibility with various plants maintain its position as the market leader in volume and value.

Public, Private, and Cooperative Sectors

The public sector (e.g., National Fertilizers Ltd. and Rashtriya Chemicals & Fertilizers) ensures consistent supply and affordability, particularly in rural areas, though aging infrastructure can pose challenges.

The private sector, led by Coromandel International, Chambal Fertilisers, and Deepak Fertilisers, focuses on innovation, specialty fertilizers, and precision farming solutions. They play a key role in R&D, branding, and market expansion, driving growth in India’s fertilizer market.

The cooperative sector distributes fertilizers effectively to farmers, particularly smallholders, offering subsidies and extension services to improve reach and reliability. Cooperatives are positioned to retain significant market share over the forecast period.

Regional Insights

Uttar Pradesh

With vast agricultural land and a large farming community, Uttar Pradesh is the fastest-growing state in the Indian fertilizer market. The state government maintains an inventory of nearly 4.8 million tonnes, covering 84% of demand during the Kharif season 2024, supporting crop cultivation and farmer welfare.

Punjab

Punjab, India’s “breadbasket,” has high fertilizer consumption, averaging 223 kg per hectare, far above the national average of 90 kg. Demand for urea, DAP, and NPK blends is strong, and government subsidies ensure affordability. Overuse of chemicals remains a concern, but adoption of bio-fertilizers is gradually increasing.

Andhra Pradesh

The fertilizer market in Andhra Pradesh supports rice, maize, pulses, and fruit production, with strong demand for urea, NPK, and DAP. The government promotes rational fertilizer use, while growing awareness of organic alternatives encourages sustainable practices. For Rabi 2024-25, 22.3 lakh metric tons of fertilizers were sanctioned for the state, supporting balanced productivity.

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Recent Developments

July 2024: Government mandates standards for Nano Urea and Nano DAP under the Fertilizer Control Order, with multiple plants established for production.

April 2023: IFFCO launched the world’s first Nano DAP Liquid Fertilizer, promoting productivity and sustainable practices.

December 2023: Rallis India Limited (Tata Group) introduced NAYAZINC™, a cost-effective zinc fertilizer for soil application.

September 2023: Coromandel International launched Cumist Calcium, an organic product enhancing soil health.

August 2023: Gujarat pioneered drone-based Nano Urea spraying, demonstrating innovative, time-saving approaches in fertilizer application.

Leading Companies in India’s Fertilizer Market

Key players include:

Nagarjuna Fertilizers and Chemicals Ltd.

Chambal Fertilisers & Chemicals Ltd.

Rashtriya Chemicals & Fertilizers Limited (RCF)

National Fertilizers Ltd. (NFL)

Coromandel International Ltd.

These companies are innovating in specialty fertilizers, micronutrient blends, and bio-fertilizers, supporting sustainable farming practices and meeting the growing agricultural demands across India.

Looking Ahead

The Indian fertilizer market is set to expand robustly through 2033, driven by population growth, government subsidies, sustainable practices, and technological innovation. While challenges such as chemical overuse, rising costs, and supply constraints persist, increasing adoption of balanced fertilization, bio-fertilizers, and precision farming ensures a positive outlook.

As India strives to feed its growing population sustainably, fertilizers remain central to the nation’s agricultural productivity. Through innovation, policy support, and a shift toward environmentally conscious farming, the Indian fertilizer industry is not just growing—it is transforming agriculture for the future.

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