Govt in talks for multi-year fertiliser deal with Russia

India is in its first government-to-government negotiations with Russia for the long-term supply of fertilisers, government and industry sources said, hedging against geopolitical instability and high global prices.

India is a top importer of urea and other soil nutrients needed to feed its huge agriculture sector, which accounts for 15 per cent of $2.7 trillion economy.

Fertilisers minister Mansukh Mandaviya along with officials from Indian fertilisers companies will visit Moscow later this month or early March to discuss the deals with Russian trade minister Denis Manturov, the government sources said.

This is the first time in 30 years that the Indian government will be involved in multi-year import negotiations for fertilisers. In 1992, India came out with a policy announcing deregulation of soil nutrients except urea.

The sources said India is aiming to lock in one million tonnes a year each of di-ammonium phosphate (DAP) and potash; and about 800,000 tonnes a year of a mix of nitrogen, phosphorus, potassium (NPK).

"Pricing and firm quantities are yet to be fixed ... Our focus is to have secure supplies at reasonable prices. Since the (Indian) minister is involved so we hope to get some discount," said one of the sources.

Rashtriya Chemicals and Fertilisers Ltd, National Fertilisers Ltd, Madras Fertilisers Ltd, Fertilisers And Chemicals Travancore and India Potash Ltd are expected to sign a three-year deal for DAP, potash and complex fertilisers with Russian companies, including Phosagro and Uralkali.

Indian firms already have an import deal for 400,000 tonnes of DAP with Phosagro and they are expected to lift the entire contracted volumes by June, coinciding with end of the current export quota set by Moscow.

"We are currently in negotiations with our Indian colleagues to extend and develop our existing agreements for the supply of Phosagro's mineral fertilisers," Phosagro told Reuters. Uralkali declined to comment.

In 2021 some states in India faced shortages of fertilisers after export restrictions by China and a record surge in global prices.