Hormuz Crisis Pushes India to Seek Urea Supplies from China

Amid the shutdown of some urea plants and a shortage of fuel triggered by the closure of the Strait of Hormuz, India has sought help from China. New Delhi, the largest importer of urea, has asked Beijing to allow the sale of some urea cargoes and consider easing export restrictions, Bloomberg reported, citing sources. The move hints at the gravity of the situation of global trade choking and is a sign of unusual measures countries are taking to secure food and energy supplies.

The Strait of Hormuz is a lifeline to global trade, with nearly 40% of world trade passing through the narrow strait. The report stated that discussions between government officials are ongoing and a final call is yet to be made.

Global benchmark prices of urea, the most commonly used nitrogen fertilizer for world food production, spiked 21% to hit a three-year high. China, the world’s largest urea producer, controls urea exports under a quota system, with allocated allowances for outbound shipments yet to be announced.

New Delhi’s request also comes just two days after it eased investment norms under Press Note 3 to gear up manufacturing and scale domestic production. Diplomatic relations with Beijing have been improving, with Prime Minister Narendra Modi visiting China and meeting Chinese President Xi Jinping last August.

India does not currently face an immediate fertilizer shortage. However, prolonged escalation of the geopolitical situation in West Asia and disruption to gas imports could compel the nation to seek more supplies before the planting season begins in June. India is likely to look for diverse suppliers for urea fertilizers, including China, Russia, Indonesia, Malaysia and Egypt, the report quoted one of the sources as saying.

In FY26, India imported 9.8 million tons of urea so far, with another 1.7 million tons scheduled to arrive in the next three months. A tender for new urea imports is expected to be issued by the end of March or early April.

Indian Urea Firms Shut Units

Some urea producers in India have already shut down their plants or moved up annual maintenance after supplies of liquefied natural gas (LNG) from Qatar were suspended following the escalation of the war in Iran. Top Indian producers, including Indian Farmers Fertilizer Cooperative Ltd., have either halted some of their facilities or started routine upkeep, according to a Bloomberg report.

LNG is the primary feedstock for urea production and serves as both an energy source and a key input for urea fertilizer. India imports nearly 85% of its urea and roughly 50% of its LNG requirement. Analysts and reports warn that a prolonged war could push prices higher, dampening the government’s efforts to subsidize fertilizers.