Virendra Pandit
New Delhi: Russia has assured India to supply more fertilizers this year, the media reported on Tuesday.
This assurance of uninterrupted fertiliser supplies to India comes at a critical juncture for New Delhi, with the government already spending close to Rs 1.10 lakh crore on fertiliser subsidies in FY27 and officials expecting the bill to rise further amid elevated global prices and supply disruptions.
President Vladimir Putin on Monday assured India of continued supplies of fertilisers and energy during External Affairs Minister S Jaishankar’s visit to Moscow, with Russia also indicating that it is increasing fertiliser supplies to meet India’s requirements.
The assurance comes as the West Asia crisis and disruption around the Strait of Hormuz have complicated global supplies of fertiliser and key inputs such as LNG.
For India, the supply question has a direct fiscal implication. The government has so far spent more than 55 per cent of its Rs 1.77 lakh crore fertiliser subsidy allocation for FY27. Of this, around 40 per cent has been incurred towards urea imports and domestic production.
The Department of Fertilisers had recently sought a 100 per cent increase in allocation over the Rs 1.77 lakh crore provided in the Union Budget, arguing that substantially higher subsidies will be required to meet demand and absorb elevated global prices. The request has added to fiscal concerns within the ministry, given the significant subsidy burden involved.
While global urea prices have eased sharply from their April 2026 peak, other fertiliser prices remain elevated. Landed urea prices have fallen around 60 per cent to USD 390 a tonne, from nearly USD 1,000 in April. However, DAP and MoP prices were around 15 per cent and 10 per cent higher, respectively, in July from a year earlier.
India imports around 70 per cent of its fertiliser requirements and raw materials, making supply disruptions particularly significant. The government has consequently diversified procurement across countries, including Oman, Malaysia, Vietnam, Russia, Nigeria, and Egypt.
The Russian assurance could provide an additional layer of supply security, but the impact on the subsidy bill will depend on global prices, import costs, and the terms at which fertilisers are sourced.
Trade deficit
Meanwhile, with India’s trade deficit with Russia widening to over USD 50 billion in 2025-26 from just USD 6.6 billion five years earlier, External Affairs Minister S. Jaishankar called for urgent steps to rebalance the rapidly expanding bilateral trade, including greater market access, removal of tariff and non-tariff barriers, stronger payment mechanisms and deeper business-to-business engagement.
“Addressing this imbalance is today one of our foremost priorities,” Dr. Jaishankar said in his opening remarks at the 27th session of the India-Russia Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC-TEC) in Moscow on Monday.
Bilateral goods trade has more than quadrupled during the period to nearly USD 60 billion in FY26. This growth, however, has been highly skewed, with India’s imports from Russia at USD 55.3 billion, dominated by oil, while its exports were just USD 4.5 billion, the reports said.
“Progress on market access, removal of tariff and non-tariff barriers, strengthening payment mechanisms, and stronger business-to-business engagement will be critical for addressing this imbalance and achieving our shared objective of USD 100 billion in bilateral trade by 2030,” the MEA said.
Russia’s emphasis on taking forward bilateral cooperation in many domains from fossil and nuclear energy, metallurgy, space, railways, fertilisers to mobility of skills, to connectivity, and to payment mechanisms, was reciprocated by Dr. Jaishankar.
He wrapped up his two-day visit to Moscow on Monday where he held a series of high-level meetings, including with President Putin. The discussions covered the broader strategic partnership as well as economic and trade ties between the two countries.
Dr. Jaishankar’s visit to Russia took place amid threats from the US on possible economic sanctions for continuing to trade in crude oil with Moscow.
“The complicated international scenario will constantly throw up fresh ideas because we are all focused on derisking and diversifying. Economic demands and technology requirements will add to this mix. Our fundamental complementarity still remains under-explored. But even the last few years have seen progress in realising this potential and we must take that forward,” he said, stressing the need to constantly explore new opportunities and possibilities for strengthening bilateral ties.
He also said India and Russia could take stock of negotiations on the proposed India-Eurasian Economic Union (IEEU) Free Trade Agreement as part of efforts to expand market access.
Dr. Jaishankar proposed a greater focus on implementation and outcomes through the IRIGC-TEC mechanism, asking its working groups and sub-groups to prioritise specific deliverables before the next session.
He called for closer engagement with businesses, saying governments could create enabling frameworks but businesses were responsible for trade, investment, innovation and job creation. Regular interaction with industry and business associations, he said, could help identify practical bottlenecks and make the mechanism more commercially relevant.