Note4Students
From UPSC perspective, the following things are important :
Mains level: India’s Imports and Exports; Impact of global crises on fertilizer;
Why in the News?
As the crises in Ukraine and Gaza persist, experts and policymakers are increasingly concerned about further rises in the costs of components essential for producing petroleum-based chemical fertilizers.
Current Scenario of Fertilizer Imports:
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How did the conflict in Ukraine impact the Global Fertilizer Market?
- Market Instability: Ongoing conflicts in Ukraine and Gaza are disrupting the stability of the global fertilizer market, particularly affecting the prices of oil and petroleum-based fertilizers.
- Supply Chain Disruptions: These conflicts affect global supply chains, particularly for fertilizer-producing countries such as Russia, which has been a significant source of fertilizer imports for India.
- Price Volatility: Higher oil prices due to geopolitical tensions in Ukraine and Gaza indirectly drive up costs of fertilizers, as these are often by-products of petroleum.
Its effects on India
- Rising Import Costs: Increased global fertilizer prices lead to higher import costs for India, putting pressure on the fertilizer subsidy budget.
- Potential Supply Constraints: India’s reliance on imports from conflict-affected regions like Russia and West Asia (including the Middle East) poses risks of reduced fertilizer availability.
- Budget Strain: India’s fertilizer subsidy allocation for 2023-24 was ₹1.79 lakh crore, with substantial amounts dedicated to both indigenous and imported fertilizers.
- Need for Self-Reliance: The conflicts underscore the importance for India to reduce dependency on imports by increasing domestic production capacity, promoting alternatives like nano urea, and exploring sustainable practices like natural farming.
Steps taken by the government:
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Way forward:
- Boost Domestic Production: Increase India’s fertilizer production capacity through investment in domestic infrastructure and support for nano urea and alternative sustainable fertilizers to reduce import dependency.
- Adopt Policy Reforms: Implement policies promoting self-reliance in fertilizers, with targeted subsidies and incentives for private, public, and cooperative sectors to enhance production and ensure affordable supply amidst global market volatility.
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