Fertilizer Shortage and Diplomatic Efforts
India faced a significant challenge with China's decision to halt fertilizer exports, marking a severe supply chain weaponization.
Impact of China's Decision
- China's export halt coincided with the onset of the Kharif season, causing a Diammonium Phosphate (DAP) shortage.
- This move came when India was engaged in Operation Sindoor against Pakistan, highlighting China's support to Pakistan.
Diplomatic Strategies and Resolutions
- India undertook quiet but massive diplomatic efforts to secure DAP stocks for the Rabi season.
- Saudi Arabia and Morocco became key players, with Saudi Arabia agreeing to supply 10 lakh metric tonnes based on a long-term contract.
- Morocco agreed to cover 5 lakh metric tonnes, leaving a shortfall of 7 lakh metric tonnes.
- Efforts are ongoing with Russia for additional supplies, as fertilizers are not under sanctions.
Future Strategies
- India aims to diversify its fertilizer supply chain by reaching out to Egypt, Nigeria, Togo, Mauritania, and Tunisia.
- China's reluctance to renew contracts since 2023 has pressured India to seek alternatives, despite cost advantages with China.
- India must analyze supply chain vulnerabilities with China across sectors to prevent future crises.
In summary, India managed the immediate fertilizer crisis with support from Saudi Arabia, Morocco, and potentially Russia, but it underscores the need for strategic supply chain diversification to counter China's political weaponization.
