India's Urea Consumption and Challenges

Current Consumption Trends

India's urea consumption is projected to reach 40 million tonnes in the current fiscal year, driven by increased demand from a surplus monsoon and an unchanged maximum retail price (MRP) for over a decade. Urea sales hit an all-time high of 38.8 million tonnes in 2024-25, with a 2.1% increase in the first six months of this fiscal year.

Historical Consumption Patterns

• Urea consumption doubled from approximately 14 million tonnes to 28.1 million tonnes between 1990-91 and 2010-11.
• In 2013-14, it rose to 30.6 million tonnes before dropping to 29.9 million tonnes by 2017-18.
• Neem oil coating, introduced in 2015, was expected to enhance nutrient use efficiency and prevent illegal use, but consumption has continued to rise, surpassing 35 million tonnes by 2020-21.

Future Outlook and Recommendations

The demand for urea is expected to rise due to its affordability, ease of application, and effectiveness. Potential measures to cap consumption at around 45 million tonnes include MRP rationalization, rationing, and chemical inhibitors. The current domestic production capacity allows for 30-31 million tonnes, necessitating imports to meet demand.

India's existing LNG infrastructure supports gas imports for urea production in certain regions, presenting economic and logistical challenges for supply management.